Under the current law, the CMA can only enforce consumer protection laws indirectly against businesses by threatening to make an application to the Court. The CMA does not currently have the power to impose sanctions on businesses for failing to comply with consumer law, and as such the risk profile associated with compliance with consumer laws has to date, been fairly low.

However, the Bill provides the CMA with much stronger enforcement powers. The CMA will soon be able to enforce consumer laws directly against businesses and will have the power to issue infringement notices, award compensation to consumers, and perhaps most importantly, impose fines. If a business breaches consumer law, the CMA will have the power to impose fines of up to 10% of its global annual turnover, and if a business fails to comply with an information request, the CMA will be able to impose a financial sanction of up to 1% of its annual turnover and/or 5% of its daily turnover. In addition, under the new rules, individuals may be fined up to £300,000 for breaching consumer law and up to £30,000 annually and/or £15,000 daily for failing to comply with an information request. 

These increased enforcement powers significantly change the risk profile associated with consumer law compliance for businesses.

Consumers are often swayed to enter into subscription contracts through 'free trial' periods and limited time offers. However, it is likely that when a consumer enters a subscription contract, they have not read the fine print terms and conditions which apply. This leaves them in a position where they may have automatically (and unknowingly) enrolled onto a subscription payment plan which automatically renews, with no clear way for them to exit the contract. Under the current law, there are no specific rules on subscription contracts to prevent consumers from falling into this type of 'trap'. However, the Bill has introduced specific rules to ensure subscription contract practices are fairer to consumers. 

Under the new rules, businesses will need to:

a) ensure consumers can easily terminate subscription contracts;
b) make arrangements to enable consumers to terminate subscriptions with a single communication, without having to take unnecessary or unreasonable steps;
c) ensure consumers can terminate subscriptions online if they were set up online;
d) provide consumers with clearer information about the terms of a subscription contract before they enter into it; and 
e) ensure consumers are notified of upcoming contract renewals. 

Many consumers pay money into savings schemes throughout the year as a way of saving up for goods or services which will be supplied to them at a later date. A key concern with these types of schemes to date is that consumers risk losing the money they have paid into a scheme if the scheme provider becomes insolvent before the consumer receives the goods or services they have saved up for. This is because there are currently no specific rules to safeguard the money paid into these types of schemes.

Fortunately for consumers, the Bill has introduced specific rules which will require businesses who operate savings schemes to maintain appropriate insurance and to hold the money on trust for the consumer, to protect the savings if the business becomes insolvent.

One of the key principles of consumer protection legislation is that consumers should be provided with clear and accurate information to enable them to make an informed decision before making a purchase. Fake reviews can mislead a consumer and may persuade them to purchase a product they believe is of a high quality and/or is exactly what they are looking for, when in fact, it is the opposite. Under the current law, there is no express prohibition against fake reviews but as their prevalence increases the government is keen to tackle this issue. Whilst the Bill itself does not contain specific rules regarding fake reviews, the government is expected to amend the list of automatically unfair commercial practices to specifically prohibit:

a) the commissioning or writing of fake reviews and/or the submission of fake reviews; 
b) the offering or advertising to submit, commission or facilitate a fake review; and 
c) the hosting of reviews without reasonable and proportionate steps taken to check the reviews are genuine. 

Businesses will be expected to comply with the above, alongside existing obligations to make sure that any information published as part of the sale and advertisement of goods and services does not deceive or mislead consumers.

In addition to the Bill, the government is consulting on further proposals for changes to consumer law in relation to the way pricing information is displayed to consumers to provide greater pricing transparency.

Currently, the display of pricing information to consumers is governed by the Price Marking Order 2004 (PMO 2004). However, the PMO 2004 does not clearly set out what businesses need to do to comply with the requirements on pricing transparency particularly in relation to certain types of promotions (such as volume pricing and loyalty pricing), which means that there is a lack of consistency in the way that businesses have interpreted them. There is therefore a concern that consumers are not being presented with clear information as to how products are priced before they make a purchase. 

The government has proposed reforms to the PMO 2004 in the Consultation with the aim of ensuring it is up to date and fit for purpose, and to create a more transparent and consistent approach to pricing for consumers so that they can make informed decisions and compare similar items more easily. In summary, the government has proposed: 

a) to mandate consistent use of unit pricing measures for products; 
b) to improve the legibility of pricing information by adopting consistent standards; and 
c) to clarify whether small shops (who are currently exempt from the rules) should be required to display prices in the same way as larger retailers. 

The government is also proposing to strengthen the requirement on businesses to provide promotional unit pricing for promotional offers, such as loyalty schemes, and is considering how Deposit Return Scheme deposits should be displayed on pricing labels. The Consultation closed on 15 October 2023 and so it will be interesting to see the outcome.