In an effort to protect customers, firms can now be fined 10% of global turnover if they fail to comply with new rules.
The government will clamp down on fake reviews and subscription traps under new measures outlined on Wednesday by the competition watchdog.
The rules, including making it “clearly illegal" to pay someone to write a fake review, will give the Competitions and Markets Authority greater powers to crack down directly on rogue traders. Clearer regulations making it easier for consumers to opt out of subscriptions they no longer want will also be introduced, and prepayment schemes like Christmas savings clubs will also have to safeguard customers' money through insurance or trust accounts.
The proposed legislation will provide protection for shoppers' savings clubs - where consumers can pay for goods and services in instalments throughout the year - which are not currently covered by the Financial Services Compensation Scheme. That means even if the company goes bust, shoppers' money will still be protected in an effort to prevent issues such as the collapse of Christmas savings club Farepak in 2006, when thousands of customers were unable to pay for festive gifts.
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