The Competition and Markets Authority has warned retailers that they should not use urgency claims to mislead consumers as it launched a new programme of consumer enforcement work focused on so-called online choice architecture aimed at tackling potentially harmful online selling practices, including pressure selling tactics such as urgent time limited claims.
The CMA has begun an investigation into Emma Sleep over concerns that some of its online sales practices may breach consumer law. As part of its investigation, the CMA will examine whether Emma Sleep has misled consumers by using countdown timers and claims about time limits to imply that a discounted price will end soon, when this may not be the case. ‘The CMA is at the initial stage of its investigation. Accordingly, it should not be assumed that any company under investigation has broken consumer protection law,’ it says.
The CMA’s consumer enforcement programme will look at online sales practices including urgency tactics such as countdown clocks, where sellers put pressure on shoppers to buy quickly eye-catching discount offers, such as ‘50% off’ claims, when the real price reduction may not be as great as claimed
Earlier this year, the CMA reported on how the way businesses present information and choices to consumers online can be used to influence people’s purchasing decisions and identified 21 potentially harmful practices which are often used across the online economy. According to the CMA, 71% of people shopping online had encountered misleading selling tactics.
‘Nearly all of us shop online and it’s easier than ever to buy something at the click of a button. With the rising cost of living, genuine deals are worth shouting about – but companies using misleading “sale” prices or fake countdown clocks can put unfair pressure on people to buy and could break consumer law. The CMA is today reminding businesses they should not use urgency claims to mislead consumers and, if they do, they face the risk of CMA action. This investigation into Emma Sleep is just the start of our work into potentially misleading online claims and all sectors are under scrutiny. Companies should take note: look at your own practices and ensure they’re in line with the law,’ says Sarah Cardell, CMA interim chief executive (pictured).
In March the Advertising Standards Authority ruled against Emma relating to the use of reference pricing and a flash sale countdown clock and in August it ruled against UK Flooring Direct for reference pricing using a countdown timer on its website.
The CMA says it will now ‘engage with the Emma Group and gather evidence to consider whether the CMA thinks any of the companies in the group have broken consumer protection law. The CMA is at the initial stage of its investigation. Accordingly, it should not be assumed that any company under investigation has broken consumer protection law.’
How the case will progress depends on the evidence – this could include the CMA closing the investigation if it believes that consumer protection law is unlikely to have been breached, securing undertakings from the company to address any concerns, or taking court action.
The CMA cannot levy administrative fines for breaches of consumer law, although the UK Government committed to giving the CMA and other regulators this power in the Autumn Statement. At present, the CMA can enforce consumer law through the courts, and where appropriate, seek additional measures to improve consumer choice, drive compliance with the law, or secure redress for consumers.
