04 September 2023 , 10:15
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A clampdown on hidden charges for online shoppers has been put forward in a new Government proposal.
New research shows “drip pricing” - where the final price you get at the checkout is higher than the one you originally saw, due to extra charges that are added throughout the ordering process - is widespread. The Government will now explore what changes can be made to help online shoppers.
The Department for Business and Trade (DBT) is consulting on whether “drip pricing” could be added to a list of practices considered to be unfair - and therefore banned - under the Digital Markets, Competition and Consumers Bill. As a result, the full end price with all extra fees included would be made clear at the start of the purchasing process.
The DBT suggests “drip pricing” has been used by 54% of sellers in the entertainment industry, 56% in hospitality, and 72% across transport and communication sectors. Overall, it suggests the total cost to UK consumers is an eye-watering £1.6 billion a year.
Another consultation will look at how the Government can stop fake reviews. Business and trade minister Kevin Hollinrake said: "Today's measures will help people keep hold of their hard-earned cash and ensure they have the clearest and most accurate information upfront before they make a purchase.
All the ways businesses overcharge or bill you for things that used to be free
"From the shelves of supermarkets to digital trolleys, modern-day shopping provides a great wealth of choice. But fake reviews and hidden fees can make those choices increasingly confusing and leaves customers unsure about what product is right for them.
"We'll be listening to industry to ensure these new regulations work for businesses too and don't generate unnecessary burdens, while at the same time providing a crucial safety net for consumers and their cash."
Sarah Cardell, CEO of the Competition and Markets Authority said: “This consultation follows recommendations from the CMA to government to tighten the rules on how everyday items are priced on supermarket shelves as well as our work tackling fake reviews online.
“We’re very pleased to see this getting underway and it’s an important step toward clearer rules and greater transparency for people when shopping around for goods and services. We’ll feed into this consultation and continue our work in these areas, which we’ll be updating on later this year.”