Theresa May unveils plan to give watchdog power to fine firms which ‘exploit’ consumers
Britain’s competition watchdog will be handed the power to fine firms which “mislead” and overcharge consumers, Theresa May has announced.
Under new rules the Competition and Markets Authority (CMA) will be able to punish businesses which they deem to have broken consumer law directly rather than having to take the matter through the courts.
Ministers said the move would make it easier to combat “exploitative” practices such as the loyalty penalty, subscription traps and unfair cancellation charges.
They add that the body’s new remit would act as a “powerful deterrent”, given they would be able to intervene earlier and more quickly.
Mrs May said: “For far too long, many big companies have been getting away with harmful trading practices which lead to poor services and confusion among customers who have parted with their hard-earned cash.
“The system as it stands not only lets consumers down but it also lets down the vast majority of businesses who play by the rules.
“It is high time this came to an end and today we are confirming our intention to give much stronger powers to the CMA, to strengthen the sanctions available and to give customers the protection they deserve against firms who want to rip them off.”
The crackdown aims to make subscriptions “as easy to exit as they are to enter”, while markets like secondary ticketing and unfair terms for care home residents would also be targeted.
Regulators, such as Ofcom and the Financial Conduct Authority, are also set to be given new powers under the plans to stop loyal customers being taken advantage of.
Other proposed measures include forcing mobile phone providers to lower their rate for a customer who has effectively paid off their handsets at the end of the minimum contract period.
The plans will be consulted on in the Government’s upcoming Consumer White Paper.
Business Secretary Greg Clark said: “The key to successful markets and businesses is ensuring that they work for the benefit of consumers and that unfair practices are tackled effectively, as the majority do.
“I strongly believe that consumer loyalty should not be exploited and nor should consumers have to work so hard to get a fair deal.
“We are committed to ensuring consumers are not unfairly targeted and penalised for their loyalty and that they can access quality products and services for a price that is competitive and fair."