Companies that take advantage of their customers’ loyalty will have to pay a charge, including telecoms firms that trap their consumers with subscription penalties.
Earlier this week, business secretary Greg Clark revealed tough new powers will be given to the Competition and Markets Authority (CMA), allowing it to determine whether consumer law has been broken without having to go through the courts.
This will allow CMA to address these problems earlier and fine firms that have been shown to penalise loyal customers.
The government hopes this will deter companies from offering ‘subscription traps’, offering misleading promises and then making contracts hard to leave.
Mr Clark stated: “I strongly believe that consumer loyalty should not be exploited and nor should consumers have to work so hard to get a fair deal.”
Prime Minister Theresa May also showed her support for the new regulations, saying many big companies have used poor trading practices “for far too long”.
“It is high time this came to an end,” she added, stating the CMA’s new powers will enable the organisation to “strengthen the sanctions available and to give customers the protection they deserve against firms who want to rip them off”.
This comes after Ofcom introduced new regulations that mean telecoms companies have to reveal their best deals to customers.
The Fairness for Customers programme, launched last month, will help 20 million Brits as it obliges telecoms providers to inform subscribers when their contracts are coming to an end and the best alternative deals for their needs.
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