CMA sets out dos and don’ts for trader recommendation sites
The CMA is consulting on advice for trader recommendation sites on how to stay on the right side of the law – meaning better protection for consumers.
- The draft advice sets out the principles trader recommendation sites should follow to ensure they stay on the right side of consumer law
- It focuses on concerns identified by the CMA, such as misleading claims about traders’ performance; a lack of effective vetting; and poor complaints and sanctions processes
- Businesses now have the opportunity to share their views on the advice
Trader recommendation sites are websites and apps often used by people to find and connect to traders from a wide range of specialisms, such as building and home improvements, plumbing, and home heating.
Working in partnership with 4 key consumer organisations – National Trading Standards (NTS), Trading Standards Scotland (TSS), The Society of Chief Officers of Trading Standards in Scotland (SCOTSS), and Northern Ireland Trading Standards (TSNI) – the Competition and Markets Authority (CMA) analysed the conduct of these sites and identified a number of concerns that had the potential to cause harm to consumers. The issues identified include:
- making potentially misleading claims – or creating the misleading impression – that a trader can be trusted, when in fact the platform does not vet or monitor traders
- failing to have appropriate vetting or verification processes in place for traders using their site or app
- failing to deal appropriately with and sanction problematic traders
- not operating effective and accessible complaints processes
- presenting consumer reviews in a misleading way and failing to take appropriate steps to remove fake reviews
To tackle these issues, the CMA’s draft advice will help trader recommendation sites better understand their obligations under consumer protection law. It provides practical advice on the key principles they should follow to protect consumers and outlines 6 key principles that these sites should follow:
- ensure that claims about services and the traders on their sites are clear and accurate, and do not mislead consumers
- conduct appropriate checks before traders are allowed to advertise on their site
- have accessible, transparent, and effective complaints processes
- effectively monitor the performance of traders on their site
- act effectively on issues highlighted by complaints or monitoring activities, including imposing sanctions
- have an effective, transparent and impartial process concerning online consumer reviews
George Lusty, Interim Executive Director for Consumer Protection, said:
More and more people are using sites and apps like these to help them find the right trader, from rewiring the kitchen to fixing a leak. But we’ve seen worrying evidence suggesting people could be misled into thinking these sites actually check traders – and will take action when things go wrong – which isn’t the case.
That’s why we’re creating advice: to make sure trader recommendation sites know what their obligations are under consumer law and what they need to do to protect people using their sites.
Mike Andrews, National Coordinator for the National Trading Standards eCrime Team, said:
We are working with the CMA, and other trading standards partners, to make sure consumers get better protection and service from trader recommendation sites. Consumers rely on these platforms to put them in touch with competent and honest traders that can satisfy their needs, and who won’t deliver a poor quality service.
Protecting consumers is at the heart of everything we do, and this draft advice is the start of ensuring that platforms take their responsibilities to vet and verify those traders they promote much more seriously. And, should things go wrong, that they provide consumers with a way to complain.
Interested parties have until 16 August 2024 to respond to the CMA’s consultation, following which a finalised version of the advice will be issued, together with practical tips to consumers on how to safely use trader recommendation sites.
More information can be found on the Trader recommendation sites consultation page.
Notes to editors
- Media enquiries should be directed to press@cma.gov.uk or 020 3738 6460.
- The key piece of consumer protection legislation relevant to the CMA’s guidance is the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The CPRs contain a general prohibition against unfair commercial practices and specific prohibitions against misleading actions and misleading omissions, as well as against failing to act honestly and in good faith.
- Trader recommendation sites, for the purpose of this draft Compliance Advice, are defined as businesses that: a) operate a website or app that consumers may use to find a trader, either in the form of a ‘matchmaking’ service in which consumers can post the work they require and traders can respond, or a database, search or listing service (or similar); and b) represent implicitly or explicitly, or otherwise create the perception or expectation, that the traders listed or hosted on the platform, or with whom matches may be made, are of a particular quality and/or are trustworthy, reliable or suitable for the consumer’s requirements.
- NTS receives government funding to commission local authorities in England and Wales to conduct specific pieces of work and take action in serious consumer protection enforcement cases. TSS performs a similar role in Scotland. SCOTSS is the professional body representing the heads of service for trading standards services in Scottish local authorities. NI TSS is the single trading standards service covering the whole of Northern Ireland.
- In February 2016, the CMA issued an open advisory letter to trader recommendation sites. The final compliance guidance, when issued, will replace the advice in this advisory letter.