The Competition and Markets Authority’s (CMA) latest £6m in fines for misleading sales tactics is a clear signal that its focus on pricing and promotional practices isn’t letting up.
Wayfair and Appliances Direct were fined for misleading customers with time-limited offers that did not end when they said they would.
Appliances Direct was also penalised for automatically opting customers into paid-for extras, while Gold’s Gym was fined for failing to make the total cost of memberships, including joining fees, sufficiently clear.
The cases highlight the CMA’s growing scrutiny of drip pricing, hidden fees, pre-ticked extras and promotional claims that give consumers a misleading impression of the deal they are being offered.
Tougher approach to consumer protection
Since gaining powers under the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) to fine businesses directly for consumer law breaches, the CMA has acted decisively against misleading sales practices.
In the last 18 months, it has imposed more than £12m in fines and secured nearly £2.4m in refunds for consumers using its strengthened enforcement powers.
The regulator can impose penalties of up to 10 per cent of a business’s global turnover or £300,000, whichever is higher, without having to go through the courts.
What is most striking, however, is the emphasis on consumer compensation.
Historically, CMA enforcement has tended to centre on changing business behaviour and imposing penalties.
Requiring businesses to put money back into customers’ pockets adds another significant dimension to enforcement.
Getting pricing and promotions wrong now carries a double cost: the financial hit of legal fees, fines and refunds, and the reputational damage of being seen to have short-changed customers.
The consequences can extend beyond the immediate financial penalty.
Consumers who discover that a supposedly time-limited offer was not genuine, that paid-for extras were added without their consent or that the advertised price excluded compulsory charges may be less inclined to trust or buy from that business again.
The recent fines should be seen as a warning to every brand, not just those already in the headlines.
What businesses should review ahead of peak trading
As we head towards retail’s peak season, businesses should review how they present prices now, rather than waiting for the CMA to come knocking.
Black Friday and Christmas promotions often rely on countdowns, limited-time discounts and special offers to encourage purchases, but businesses need to ensure the savings communicated to consumers are genuine and limited-time offers end when they say they do.
There are several areas that warrant particular attention:
- Mandatory fees: Review advertised prices to ensure they include all compulsory charges, such as joining or sign-up fees. Audit the full online purchasing journey to check that customers are given a clear picture of the total cost right at the start of the journey.
- Optional add-ons: Make sure additional services are clearly presented as optional and kept separate from mandatory charges. Customers must actively agree to pay for them, rather than being automatically opted in.
- Promotional deadlines: Ensure offers genuinely end when advertised. Countdown timers and limited-time messages should reflect real deadlines, rather than being repeatedly extended or used to create artificial urgency.
- ‘From’ pricing: Only use starting prices where they are genuinely available to a meaningful number of customers. Any conditions, such as eligibility for student discounts, should be made clear.