Posted on: 03/05/2023 by: David Morgan in: Business Information, SMEs, Startups
Fake reviews have caused frustration and despair for online retailers and shoppers alike for years but have escalated recently to record levels. Estimates reveal fake reviews account for up to 30% of all reviews online, which is a startling amount when you consider 90% of consumers use reviews as a guide before deciding whether to make a purchase or not. You will be relieved to know that all of this is about to change with new UK legislation to combat the problem.
The UK Government’s new Digital Markets, Competition and Consumer Bill will make buying, selling or hosting fake reviews illegal. People will no longer be allowed to receive payment or free goods in exchange for writing positive reviews. Businesses will also have to take reasonable steps to ensure that reviews on their website are genuine. Additionally, companies will have to notify customers when an introductory offer or free trial is coming to an end and remind them before a contract automatically renews. All of this will ensure customers can get out of a contract quickly and easily and not be stuck paying for a subscription they don’t use. The bill is also aimed at ending the tech giants current market dominance and encourage competition.
Fines for non-compliance
The newly formed Digital Markets Unit, will be part of the Competition and Markets Authority (CMA), will have the power to award consumers compensation and fine businesses up to 10% of their global annual turnover for breaching the new rules, or up to £300,000 for an individual. Prior to this legislation consumers could only take action via the courts, which was a time consuming process.
The CMA made headlines a few years ago when it ordered Facebook to crack down on fake reviews in 2020 and 2021. The social network removed 16,000 groups which were trading fake reviews. Consumer magazine Which estimates that the groups the CMA has reported to Facebook during the past five years exceeds one million members.
During the challenging economic climate, where people are trying to save money by reducing spending to be able to cover soaring energy bills and escalating food costs, the government reveals that the average household in the UK spends approximately £900 every year after researching reviews, and £60 is wasted on subscriptions they no longer want.
Consumer minister, Paul Scully, welcomed the measures and said:
“No longer will you visit a five-star-reviewed restaurant only to find a burnt lasagne or get caught in a subscription in which there’s no end in sight, Consumers deserve better, and the majority of businesses out there doing the right thing deserve protection from rogue traders undermining them.”
Rife across all sectors
Fake reviews aren’t just plaguing the leading tech companies, they’re infiltrating all manner of services and products. You probably review a restaurant before booking a table, or a physiotherapist before seeking treatment and no doubt you check online before booking your holiday.
Trustpilot, a leading reviews website, said it "welcomes legislation introduced with the aim of protecting consumers from fake reviews". And went on to say it is "continually working to ensure we are taking appropriate action against attempts to manipulate reviews on our site".
The travel reviews website TripAdvisor, also welcomed the news and said its operations "are geared towards identifying, blocking and removing fake reviews".
Becky Foley, senior safety director at TripAdvisor continued:
"The most direct way to protect consumers from biased and inaccurate information is to focus public policies and enforcement on the bad actors.”
Measures will also protect members of prepayment schemes including savings clubs, where people save money for Christmas or spread the payment for a purchase throughout the course of a year. Unlike money held in savings accounts, payments in savings clubs is not protected by the UK’s Financial Services Compensation Scheme. When Farepak, the Christmas hamper company, folded more than 15 years ago, 100,000 customers couldn’t access their savings, so the new legislation is long overdue.
The internet is rife with unscrupulous companies paying for five star reviews, suppressing negative feedback and posting their own testimonials, so regulation that protects consumers is great news. I always look at reviews before making a purchase, so it’s reassuring to know that I can trust them going forward.
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