The Competition and Markets Authority (CMA) could be given new powers to tackle consumer law without having to go through the courts.
Under plans unveiled by Business Secretary Greg Clark today (Tuesday), the UK government will consult on giving the competition watchdog new powers to intervene earlier and would include being able to directly impose fines on firms for poor business behaviour.
It would act as a “powerful deterrent” to companies that are harming consumers with misleading claims, unfair terms and conditions and hard-to-exit contracts.
The measures would also help the CMA to tackle bad practices in other consumer markets like secondary ticketing and unfair terms for care home residents.
Clark said: “The key to successful markets and businesses is ensuring that they work for the benefit of consumers and that unfair practices are tackled effectively, as the majority do. I strongly believe that consumer loyalty should not be exploited and nor should consumers have to work so hard to get a fair deal.
“We are committed to ensuring consumers are not unfairly targeted and penalised for their loyalty and that they can access quality products and services for a price that is competitive and fair.”
In November 2017, the CMA announced enforcement action against four major secondary ticketing websites – Viagogo, GetMeIn, Seatwave and StubHub. While three of the companies complied, controversial site Viagogo missed the deadline and was threatened with court, fines and prison time for its executives.
As recently as March 2019, the watchdog said it was ready to take legal action against the resale site as it allegedly remained non-compliant with a court order served in November 2018.
The proposed measures come as the government publishes a direct response to the recommendations by the CMA on the Super Complaint on consumer loyalty brought forward by Citizens Advice.
The new powers will be consulted on in the government’s upcoming Consumer White Paper.
Prime Minister Theresa May said: “For far too long, many big companies have been getting away with harmful trading practices which lead to poor services and confusion among customers who have parted with their hard-earned cash.
“The system as it stands not only lets consumers down but it also lets down the vast majority of businesses who play by the rules.
“It is high time this came to an end and today we are confirming our intention to give much stronger powers to the CMA, to strengthen the sanctions available and to give customers the protection they deserve against firms who want to rip them off.”