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Consumer groups welcome new CMA powers

Anti-touting group FanFair Alliance says the Competition and Markets Authority's current lack of enforcement powers has "served to benefit companies like Viagogo"

By Jon Chapple on 19 Jun 2019

The CMA (Competition and Markets Authority) powers are part of a raft of new announcements by outgoing PM Theresa May

The CMA powers are part of a raft of new announcements by outgoing PM Theresa May


image © Jay Allen/Crown copyright

The Competition and Markets Authority (CMA), the UK’s competition regulator, will be given new powers to impose fines on businesses that mislead or overcharge customers, under plans unveiled by the outgoing prime minister, Theresa May, yesterday.

The government is to consult on whether the CMA should be given new powers to decide itself whether consumer law has been broken without having to go through the courts, as is currently the case. New powers would enable the CMA to intervene earlier and more quickly to tackle violations and would include being able to directly impose fines on firms for poor business behaviour.

Adam Webb, campaign manager for FanFair Alliance, says the anti-touting organisation welcomes the proposed new powers, which would have been useful in dealing with rogue secondary ticketing sites such as Viagogo, against which the CMA was forced to obtain a court order to ensure compliance with consumer law.

“We would strongly support new enforcement powers for the Competition and Markets Authority to tackle businesses that continually break consumer law. In fact, they can’t come soon enough,” says Webb. “The absence of such powers has undoubtedly served to benefit companies like Viagogo that operate with a flagrant disregard for lawmakers, regulators and the public.

“Even against a tide of political and regulatory pressure, we still hold concerns that Viagogo is not yet fully compliant with terms of a court order issued over six months ago.”

“New enforcement powers … can’t come soon enough”

Caroline Normand, director of advocacy for the Consumers’ Association (Which?), also welcomes the proposals. She says: “Action to impose fines on firms that harm consumers through excessive charges, misleading offers and confusing practice can’t come soon enough and should act not only as a deterrent, but as an incentive to give consumers a fair deal.”

May’s plans, presented by business secretary Greg Clark, follow a so-called super-complaint by Citizens Advice which alleged that banks, insurers and internet companies were exploiting customer loyalty. The organisation, a network of 316 charities, complained last year that consumers were collectively being ripped off by more than £4bn a year for staying loyal to their broadband, mobile, home insurance, mortgages and savings, rather than switching, according to the FT.

“We also welcome much-needed new powers for the CMA and other regulators to finally clamp down on the ongoing bad practice of excessive, so-called loyalty penalties, which cost consumers billions of pounds a year,” comments Normand.

Outlining the proposals yesterday (18 June), 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.”

 


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