We have written a lot about the CMA's work on online choice architecture and its workplan for the future. It has now published the results of a survey where 24% of UK consumers said they had fallen victim to sneaky online sales tactics; 23% didn’t realise tactics such as ‘15 minutes left of sale’ or ‘buy now’ can sometimes be false or misleading; and 68% thought these types of misleading tactics should be banned
Against this backdrop, the CMA has now launched its "Online Rip-Off Tip-Off" campaign, which this year is urging consumers to report online rip-offs via a new digital reporting tool.
Alongside the new tool, the CMA has written an open letter to UK businesses, setting out its ‘online red lines’ on misleading price reduction and urgency claims – which are a type of pressure selling. It provides practical illustrations of where common online tactics may be misleading consumers or applying unfair pressure. The advice is for all businesses that sell or promote products online to UK shoppers, so they can stop sales practices that could break the law, especially the Consumer Protection from Unfair Trading Regulations 2008.
The practices at issue are:
- Urgency claims: Any scarcity, popularity, ‘act fast’ or time limited claim (including a countdown clock) that is presented to consumers online. For example, ‘Only 7 left’, ‘14 sold in the last 24 hours’, ‘Hurry! Today only’, ‘Offer ends in 02:50:56’.
- Price reduction claims: Any discount or special offer price that refers to a higher comparison price. For example, ‘£32 £16’, or ‘Was 45. Now £20’.
- Pressure selling: a sales tactic used to give a misleading impression of the limited availability, popularity or usual selling price of a product or service.
- Hidden charges: unexpected compulsory fees, charges or taxes being added when someone tries to make an online purchase.
- Subscription traps: misleading a customer into signing up to, and paying for, an unwanted subscription that can be difficult to cancel.
- Fake or misleading reviews: Reviews which do not reflect an actual customer’s genuine opinion or experience of a product or service.
As we said last week, it feels like the CMA is gearing up to take a more active role in regulating consumer laws post-Brexit and ahead of the new pro-competition digital regulatory regime that the UK government has committed to introducing through new legislation in the current parliamentary session.
Businesses are advised to review their online sales processes and ensure that they comply with consumer law before the CMA comes knocking.