In the second of three articles looking at how the travel industry will be affected by future consumer protection law in the UK and the EU, we analyse plans by the UK government to ban a number of travel promotion practices. The first article looked at how the travel industry will be affected the overhaul of the enforcement powers by the UK and EU regulators.
There are several aspects of selling holidays which the UK regulators are seeking to outlaw by the introduction of new consumer protection laws. With the government having now closed its consultation, we can expect an announcement very shortly on how it plans to introduce these laws to provide for these new protections. We look at three key areas of concern and the how legislation would protect holidaymakers.
The Government intends to tackle the industry of creating and selling fake reviews, which it sees as being misleading for consumers and damaging for honest businesses. As such, the Government is considering introducing new laws which:
Prohibit a business from commissioning any consumer reviews, or alternatively prohibiting the commissioning of fake reviews;
Prohibit a business from hosting consumer reviews without taking steps to check that they are genuine.
Prohibition of dark patters
The use of “dark patters” has long been a feature of ecommerce platforms, whereby certain techniques are used to make the consumer take decisions which they might not have intended and which are potentially harmful to them. Such techniques include using countdown timers, signalling that a product is likely to become unavailable and “drip pricing”. Indeed, the practice of drip pricing has long been an area where enforcers have taken action against travel companies, objecting to the practice of fees or charges being added on the check-out page and not included in the original headline price shown to the customer.
The Government is looking to strengthen the law in this area so that enforcers can take action to prohibit these practices. The Government is also going to champion “fairness by design” principles to ensure that websites are designed from the outset to be fair to consumers. Finally, the Government is looking to ensure that search results shown on a business’ website, which are influenced by third parties paying to have their services featured more prominently, should be clearly identified to the consumer as advertisements.
Strengthening prepayment protection for consumers
The Government is looking to introduce laws which allow it to require certain prepayments to be ringfenced. This means that, if the relevant business fails, the consumer would receive back the prepayments made. The Government specifically mentioned the possibility of protecting payments to savings clubs by way of insurance or trust accounts, but it may introduce such requirements to other areas where prepayments are taken from the customer. This will potentially capture holiday savings clubs and accommodation bookings, although no specific proposals have yet been made.
In our final article, we shall focus upon new laws introduced in the EU to strengthen consumer protection and to sanction businesses for non-compliance. In the meantime, please do not hesitate to contact a member of the Fox Williams travel team if you would like to discuss how best to prepare your business for these new regulations.
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