In the recently published update from its Covid-19 Taskforce, the CMA reminds businesses that consumer rights cannot be ignored during the current crisis. The Covid-19 Taskforce was launched in March to respond to consumer and competition problems arising from the pandemic. The update sets out the work of the Taskforce, focusing on the complaints they have received and the actions it has taken.
Some of the highlights in the update include: as at 19 April, the CMA received just under 21,000 Covid-19 related complaints; the CMA have written to 187 individual business asking for more information or expressing concern about unjustifiable price rises; and complaints relating to cancellations and refunds now account for 4 out of 5 complaints being received.
The two principle concerns of the CMA are around refunds and cancellations and unjustifiable price rises.
Cancellations and Refunds
Unsurprisingly most complaints received by the CMA now relate to cancellations and refunds, with 74% of complaints about cancellations relating to goods and services bought online.
The Taskforce is particularly concerned about businesses refusing refunds; introducing unnecessary complexity into the process of obtaining refunds; charging high administration or cancellation fees; and pressuring consumers into accepting vouchers instead of cash refunds.
Such practices are being looked at closely by the Taskforce – with a focus on sectors and individual businesses that have been the subject of a high volume of complaints – and yesterday the CMA issued a statement on its views on consumer protection law in relation to cancellations and refunds during the current crisis. In a press release this morning the CMA announced that it has launched a programme to investigate reports of businesses failing to respect cancellation rights and where they find evidence of businesses failing to comply with the law, appropriate action will be taken including moving quickly to court if a business does not address the concerns raised by the CMA.
Unjustifiable price rises
In recent weeks the volume of price-related complaints received by the CMA have started to decline however it remains an area of concern for the Taskforce. Many of the complaints received about unjustifiable price rises relate to listings placed on online platforms and the CMA have engaged with platforms eBay and Amazon to ensure that such listings are removed quickly.
To date the Taskforce has responded to complaints about unjustifiable price rises by setting out their expectation to industry and trade bodies, engaging with online retail platforms, and requesting information from individual businesses. Some businesses have responded and attributed the high prices to higher costs charged by suppliers and the Taskforce is seeking further evidence of these claims.
The coronavirus outbreak, and the necessary restrictions on businesses and people, continue to present significant risks that prices are raised above justifiable levels in a number of sectors and the Taskforce will continue to monitor complaints. It will also continue to seek further evidence, including about price increases further up the supply chain. Businesses suspected of raising prices to unjustifiable levels will be warned about their conduct and where there is evidence that competition or consumer provision law may have been broken, the CMA stand ready to take enforcement actions.
Businesses are advised to deal with any warning received from the CMA promptly, given the possibility of enforcement action, and the reputational consequences of being seen by their customers to exploit the outbreak.
And where there is evidence that competition or consumer protection law may have been broken, we stand ready to take enforcement action.