New UK Law to Take On Sneaky Hidden Fees and Fake Reviews

Department for Business & Trade - UK | Photo Credit : UK Government Website

By Vineet Malik | January 29, 2024 | London, England

Hidden or Dripped fees cause UK consumers to spend an additional whopping £3.5 billion online each year

The Enterprise, Markets and Small Business Ministry, United Kingdom (UK) made it official last Tuesday to make it mandatory for all businesses to include the final price shown as the headline price in the new Digital, Markets, Competition and Consumer Bill (DMCC) to be enacted soon.

Sneaky Hidden Fees and Fake Reviews will be added to the banned business practices.

The DMCC Bill will also look at other consumer issues including subscription traps and streamline investigation where companies collude to bump-up prices at the expense of consumers.

Hidden Fees or Drip Pricing

Consumers are shown an initial price for a good or service, while additional fees are disclosed later while checking out.

Minister for Enterprise, Markets and Small Business – Kevin Hollinrake said “From Supermarket shelves to digital baskets – modern day shopping provides customers with more choice than ever before. But with that, comes the increased risk of confusion, scams and traps that can easily cost the public more than they had planned. The announcement demonstrates the clear steps we’re taking as a government to ensure customers can compare purchases with ease, aren’t duped by fake reviews and have the sting of hidden fees taken away. Working with the Competition and Market’s Authority, new guidance will be enacted in the coming months.

Now, website hosts will be held accountable for reviews on their pages. 

The Price Marking Order (PMO), a piece of retained European Union (EU) Law will also be reformed. Now we have taken back control of our laws.

The PMO requires traders to display the final selling price where appropriate, the final unit price (for instance price per litre/kilogram of products in a clear way.

The EU’s PMO Laws were last updated 20 years ago and no longer reflect modern shopping habits.

We will be working with stakeholders and businesses to create new, simpler and cleared guidance for pricing labels that works best for British businesses and improves the shopping experiences for the UK customers.

This is expected to be issued in the spring.

Our proposed changes will ensure unit pricing is consistently applied, including promotions and special offers. Small shops that are currently exempt from the PMO will continue to be exempt from those specific measures.

Optional fees such as airline seat and luggage upgrades for flights will not be included in these measures."

A detailed research conducted by a team of Economists, Data Scientists and Social Researchers at London based Alma Economics involved in the most critical issues faced by people in society evaluated the harm it may cause to consumers in the UK. Study inferred that Drip Fees cause UK consumers to spend an additional £595 Million to £3.5 Billion online each year.

The findings also shockingly inferred that Drip Pricing is used by online businesses in the UK despite the existence of Consumer Protection legislation such as Consumer Protection from Unfair Trading Regulations 2008.

The Revelation questioned the Minister for Enterprise, Markets and Small Business on below stated pertinent issues.

• Continuing unethical practices by business organisations, despite the existence of Consumer Protection from Unfair Trading Regulations 2008.

• Exempting small shops from the PMO.

• Initiating action against the UK based unethical companies that compulsorily save the debit/credit card details in their system despite refusing to give the consent by online consumers.

• Subscription traps targeting online consumers to compulsorily pay for the second year as well through minutely worded Terms and Agreement.

However, the Minister’s official spokesperson refused to comment anything on such pertinent issues as of now.