The Government is considering changes to stop the “widespread” practice of hidden online fees
The Government has unveiled a proposal to tackle hidden fees for online consumers, as new research shows the practice is widespread.
The Department of Economy and Trade (DBT) said it would discuss plans to improve transparency in the presentation of prices in order to eradicate the so-called drip pricing method, which initially only advertises a part of the product price but hides it Mandatory fees apply which increase the final cost.
New government research confirmed the practice was “widespread,” according to DBT. 54% of providers in the entertainment industry used drip pricing, 56% in the hospitality sector and 72% in the transport and communications sector.
The cost to British online consumers is £1.6 billion a year, according to government figures.
The DBT said the tactic was used on products such as train tickets and food deliveries.
Today’s actions will help people keep control of their hard-earned money and ensure they have the clearest, most accurate information upfront before making a purchase
The government will now consult on possible enforcement of changes, following a suggestion from Prime Minister Rishi Sunak in June that the government would take further action on the matter.
The DBT said it is currently consulting on what measures the government should take in response to drip pricing. This could include inclusion on a list of business practices that are considered unfair and therefore prohibited under the Digital Markets, Competition and Consumers Act.
The intended effect would be to require consumers to be presented with information about mandatory fees at the start of the purchasing process.
Labor has previously proposed such a change.
The government is also launching a consultation on measures to prevent fake online reviews, which could lead to the practice being added to the same list.
Elsewhere, plans to simplify food labeling will also be consulted, the government said following a review by the Competition and Markets Authority (CMA).
The DBT said it had put forward proposals to reform the price display regulation, which requires retailers to clearly display the final selling price, with plans aimed at ensuring that unit prices are applied consistently, including in promotions and special offers.
Business and Trade Minister Kevin Hollinrake said: “Today’s measures will help people keep control of their hard-earned money and ensure they have the clearest and most accurate information upfront before making a purchase.”
“From supermarket shelves to digital shopping carts, modern shopping offers a wide range of choices.
“But fake reviews and hidden fees can make this choice increasingly confusing and leave customers unsure about which product is right for them.
“We will listen to industry to ensure that these new regulations work for businesses and do not create unnecessary burdens, while providing a critical safety net for consumers and their money.”
https://www.standard.co.uk/business/business-news/government-assesses-changes-to-stop-widespread-practice-of-hidden-online-fees-b1104544.html The Government is considering changes to stop the “widespread” practice of hidden online fees
