Shops will be banned from offering “bogus” discounts designed to trick buyers into thinking they are getting a good deal, under government plans to help with the cost of living crisis. New rules will also make it easier to cancel subscriptions, to stop firms offering low prices for new customers only to “trap” them into making expensive payments later.
Prime Minister's announcement
Prime Minister Andy Burnham said the announcements were “just the start” of practical measures to help households struggling with bills. But Conservatives claimed the Government was carrying out policies first introduced by the previous government, and accused Labour of putting up costs with tax rises.
Today’s announcements include preventing shops from falsely claiming goods are being sold at a discount by deliberately pushing up the price of an item for a short period only to cut it again.
Consultation on banned practices
A consultation this autumn will consider whether tactics such as fake “was” prices, invented discounts and misleading recommended retail prices should be added to the list of practices banned under the Digital Markets, Competition and Consumers Act (DMCCA).
New rules coming into force in January 2027 will also require businesses offering subscriptions to provide clearer up-front information, regular reminders to customers and an easy way to end contracts. A new 14-day cooling-off period will also let consumers cancel after a trial, or when a long-term contract renews.
Impact on consumers
There are around 155 million active subscriptions in the UK, with consumers spending an estimated £1.6 billion a year on ones they don’t actually want.
Mr Burnham said: “I’m determined to pull every single lever we can to provide people with some room to breathe on the cost of living.” He said: “These are just two of the everyday fixes we’re going to be rolling out – today is just the start. We want to put more money in people’s pockets and give people hope that politics really can work for them and their everyday lives.”
Political reaction
Shadow Chancellor Mel Stride said: “Andy Burnham has already run out of ideas. The cost of living didn’t become a problem last week, so you have to ask why it has taken Labour so long to enact legislation passed by the previous Government.
“Labour’s tax hikes have sent costs soaring for hardworking families and destroyed jobs. Consultations and reheated measures won’t make up for that. Only the Conservatives have detailed, clear plans to tackle the cost of living by cutting taxes, cutting energy bills by £200 and getting Britain working again.”
Consumer groups welcome move
Dame Clare Moriarty, Chief Executive of Citizens Advice, said: “For too long consumers have been tricked into paying for products or services they don’t use - or didn’t even want to begin with - costing millions of pounds each year. So we really welcome the government’s move to speed up action on subscription traps and look at banning other tactics firms use to catch consumers out.
“At Citizens Advice, we’ve sounded the alarm on this for years, because we know subscription traps and sneaky online practices that hit consumers’ pockets hard are a widespread problem.”
