Consumer law fines and other changes in 2025 and 2026

The Government recently announced the expected implementation timetable for the consumer law aspects of the Digital Markets, Competition and Consumers Act 2024. When implemented, the Act will bring in the following changes:

• Reform of consumer enforcement law. The Act introduces new powers including provisions allowing the CMA to impose civil fines of up to 10% of turnover for breach of consumer laws. These changes are expected to come into force in April 2025. These new sanctions apply in addition to the existing criminal regime but are expected to be used in preference to this regime since they will not require the CMA to go to court to impose the fines – rather the entity fined will need to go to court to challenge the fine.
• Replacing the Consumer Protection from Unfair Trading Regulations 2008. The new regime is very similar to the existing one in most respects, but with some new elements.  Some changes relate to the definition of “average consumer” which remains part of the definition of many of the prohibited unfair practices. These changes are expected to come into force in April 2025:
  o  The definition of “average consumer” is updated so that the average consumer is to be treated as not knowing information relating to a commercial practice where the information has been concealed by the trader.  This is the case even if the average consumer might know the information through another source.
  o  Where a group of consumers is particularly vulnerable to a commercial practice in a way that the trader could reasonably be expected to foresee, as under the current regime, the definition of average consumer is read as an average member of that vulnerable group. The non-exhaustive definition of factors that may make consumers vulnerable is expanded from age, physical or mental health and credulity to also include “the circumstances that they are in”. This broader definition is a factor in determining if a commercial practice is an "aggressive practice" in breach of the law and will also need to be considered in relation to groups of applicants and students, alongside other consumer law obligations and other duties such as under the Equality Act 2010.
  o  New measures intended to tackle fake and misleading reviews, including consumer reviews that conceal the fact that they have been incentivised.  Insofar as institutions host reviews on websites and similar or use them in advertising they will have new obligations to perform checks that the reviews are genuine.
  o  New measures intended to tackle “drip pricing”.  This is done through amending the definition of what is material information in an invitation to purchase so that it includes the “total” price. “Total price” is defined to include any fees, taxes, charges or similar payments the consumer will necessarily incur.  As under the current regime, there is an exception where the nature of the product or service means that the price cannot reasonably be calculated in advance. Broadly speaking in such scenarios, the material information must include an explanation of how the price will be calculated and must be equally prominent with any other material information about the total price.
• A new notice, information and cancellation regime applicable to “subscription contracts”. These measures are broadly speaking intended to provide consumers with additional cancellation rights in relation to subscription contracts. For any in scope contracts, this regime will require time to review and update existing procedures, notices and information. The Government says these changes will take effect “not before Spring 2026 at the earliest”. The subscription contract provisions will not apply to contracts entered before section 254 is in force.
• New insurance and information provision duties in relation to consumer savings schemes. These rules are expected to come into effect not before April 2025.
• A requirement for compulsory accreditation of alternative dispute resolution providers. The OIA is exempt from this requirement. The new provisions are expected to come into effect after April 2025.

If you wish to discuss the above, please contact Katrina Anderson, Kate Allan or another member of our education law team.