New law: Businesses prepare for new laws on fake reviews, customers exiting subscription agreements, and pre-payment schemes

The new rules make it unlawful to commission someone to write or submit a fake review, or to offer or advertise to write, facilitate or submit one. Businesses must also take reasonable steps to ensure reviews they display are genuine.

To stop subscription traps, businesses will have to tell potential subscribers clearly and simply how they can end their subscriptions – which must be a straightforward process - before they subscribe. Businesses must also send reminders before the end of free trials, and in advance of any automatic renewal dates.

Members of Christmas clubs and similar pre-payment schemes which are not currently covered by financial services compensation schemes will have to insure them or set up appropriate trust arrangements to protect consumers.

Maximum penalties for businesses which break the new rules include fines of up to 10% of yearly global turnover for the most serious offences, and will be enforced by the Competition and Markets Authority – consumers will not need to take action themselves. Individuals who breach them can be liable to fines of up to £300,000.

The date the new rules will be brought into force has yet to be fixed, but businesses can start to review their activities now for easier compliance in due course.

Operative date

• To be announced

Recommendation

• Businesses relying in whole or part on reviews, and subscription-based businesses, should review their business models, terms of business, practices and processes, particularly where they need to take reasonable steps to ensure reviews are genuine.
• Businesses that operate pre-payment schemes should investigate possible insurance or trust arrangements.