Government to impose ban on fake reviews and ‘dripped fees’

Businesses will be banned from posting fake reviews and introducing drip pricing under new government legislation.

The Department for Business and Trade announced the crackdown on “unfair trading practices” will be taking place in the coming months.

‘Dripped fees’, which occur when customers are shown an initial price for goods or services then asked to pay additional costs at the point of checkout, will be added to a list of banned business practices after research revealed “unavoidable fees” cost consumers £2.2m.

Mandatory fees, such as booking fees, will be required in the headline price at the start of the shopping process, while optional fees, such as airline seat and luggage upgrades for flights, will be exempt from the policies.

Kate Nicholls, chief executive of UKHospitality, said: “The vast majority of additional fees involved in hospitality bookings are optional and designed to offer customers ways to enhance their experience, such as adding breakfast to a hotel stay.

“We’re pleased the government has taken on board our feedback and excluded optional extras from an outright ban. This means customers will still be able to upgrade and customise their hospitality experience as they see fit.”

However, Richard Collie, managing associate at UK law firm TLT, warned more clarity is needed on the definition of optional charges so that businesses are able to apply this practice consistently.

“The new rules represent a huge shake-up in how prices can be presented on online platforms and we strongly advise hospitality businesses to monitor these developments closely and ensure soon-to-be-published guidance reflects the nuances of your business practices,” he added.

The consultation into consumer transparency, which was commissioned as part of the Digital Markets, Competition and Consumer Bill (DMCC), also advised the banning of fake reviews.

Website hosts will be held accountable for its listed reviews upon the publication of new guidance from both the government and the Competition and Markets Authority.

Nicholls said: “Banning fake reviews is a positive step, given the significant reputation damage and financial impact they can have on businesses. It’s essential that deliberate fake reviews of businesses on third-party platforms are covered by this legislation and we look forward to working with the government as these plans develop.”

The measures will be legislated under the DMCC Bill as it progresses through parliament.