Tag: rip-off pricing

Burnham to roll out a series of ‘everyday fixes’ to help people with the cost of living

  • Prime Minister moves to end subscription traps, with new “easy to exit” rules brought forward to help consumers cancel easily and prevent them losing more money
  • He is also taking action to tackle misleading discounts and rip off prices that fleece customers
  • This is just the start of a series of ‘everyday fixes’ that will be announced to ease the cost of living and give families room to breathe

The Prime Minister has announced that he will be rolling out a series of ‘everyday fixes’ to help people with the cost of living. 

Pretend prices and deceptive deals will be a thing of the past under the Prime Minister’s plans to ban retailers from making misleading claims to customers about discounts. 

Shoppers have increasingly complained about outlets artificially inflating prices to give a false sense of value, such as increasing them only to then immediately advertise ‘discounts’ to make savings look larger than they really are.

This includes discounted prices being the same as they were before the discount, intended to trick consumers into thinking they are getting good value whilst saving them nothing and creating an uneven playing field for honest competitors.

The Prime Minister also wants to see an end to subscription traps, where people find it hard to cancel their subscriptions and contracts are automatically renewed at a higher cost.  New rules will now come into force in January 2027, in time for when customers often start new subscriptions for the year ahead.

These proposals were previously announced by Burnham’s predecessor Sir Keir Starmer, who promised to introduce new rules in Spring 2027.

Saving an average of £14 a month for every unwanted subscription, the changes will mean businesses will need to provide clearer up-front information, regular reminders and a much easier exit to contracts.  A new 14-day cooling-off period will also let consumers cancel after a trial or long-term contract renews.

With households still watching every pound, it’s right to act to restore fairness. There are around 155 million active subscriptions in the UK, with consumers spending an estimated £1.6 billion a year on ones they don’t actually want, a direct hit to family budgets.

For the many businesses who already give customers plenty of notice before subscriptions renew and make contacts easy to leave, very little is changing. They will benefit from clearer rules and a more level playing field, without being undercut by competitors who have more complicated processes that rip off consumers.

Certain charitable memberships for cultural and heritage organisations will be excluded from the new subscription rules given the unique role they have in preserving and opening up access to the nation’s history, landscapes, and cultural collections.

Prime Minister Andy Burnham said: “I know people are sick and tired of rip-off discounts and subscription traps. Westminster has got used to telling people that everyday hassles like this are just part of life.

I don’t think that’s right, especially when the cost of living continues to weigh heavily on so many people’s lives.  I’m determined to pull every single lever we can to provide people with some room to breathe on the cost of living. 

“We’re putting an end to phoney bargains. If something is advertised as half price, it should actually be half price. We’re also making it as easy to leave a subscription as it is to join.

“These are just two of the everyday fixes we’re going to be rolling out – today is just the start. We want to put more money in people’s pockets and give people hope that politics really can work for them and their everyday lives.”

The Prime Minister is ‘determined to use every chance he gets’ to restore fairness and take pressure off people. This is the start of a series of practical, everyday fixes that will put more money in people’s pockets, give them greater peace of mind, and make life a little easier.

This follows his week-one action to cap bus fares and make energy bills more affordable for millions of households. 

A consultation will launch this autumn to assess whether tactics such as fake “was” prices, invented discounts and misleading recommended retail prices (RRPs) should be added to the list of practices banned under the Digital Markets, Competition and Consumers Act (DMCCA).

Under current laws, it can be difficult for enforcers to take on these cases. Adding these tactics to this list would mean they will automatically be considered unfair, making it easier to crack down while making rules simpler for businesses to follow.

Business, Innovation, Science and Trade Secretary Jonathan Reynolds said: “There’s nothing worse than realising you’ve been fleeced by a dodgy deal, or seen money leaving your account because of a subscription you didn’t want to renew or couldn’t easily cancel.

“This Government is on the side of families working hard to make ends meet, while making sure the rules are clear for businesses and easy to follow.”

Sue Davies MBE, Head of Consumer Rights Policy at Which?, said: Which? has repeatedly exposed businesses, including trusted household brands, ripping off customers with dodgy deals that aren’t what they seem – but regulators have often found it too difficult to take action. 

“It’s great news that the government intends to tighten up the law and explicitly ban misleading pricing practices, while putting an end to subscription traps.

“The government must implement these rules swiftly to give consumers much-needed protection against sneaky pricing tactics and hold businesses to account with tough enforcement, including fines, if they fall short.”

Dame Clare Moriarty, Chief Executive of Citizens Advice, said: “For too long consumers have been tricked into paying for products or services they don’t use – or didn’t even want to begin with – costing millions of pounds each year. So we really welcome the government’s move to speed up action on subscription traps and look at banning other tactics firms use to catch consumers out.

“At Citizens Advice, we’ve sounded the alarm on this for years, because we know subscription traps and sneaky online practices that hit consumers’ pockets hard are a widespread problem. We previously found that over 13 million people (26% of UK adults) accidentally took out a subscription in a year. 

“People shouldn’t have to waste their time and effort avoiding dubious online tactics and fixing unwanted purchases and sign-ups. Today’s announcement is an important move, but it can’t be the end of the story.

“We look forward to seeing the detail in the consultation on deceptive online pricing and how it will ensure consumers are protected and treated fairly.”

Helen Undy OBE, CEO of the Money and Mental Health Policy Institute, said: “It can be hard for anyone to spot a misleading discount, but this is particularly difficult for people with mental health problems who can struggle with concentration, impulsivity and decision-making, which can make it harder to resist pressure selling tactics and compare prices to get a fair deal.

“This group is already at the sharp end of the cost of living crisis – people with mental health problems are three times as likely to currently be behind on some or all household bills – so it’s good news that the government is taking action to help tight budgets go further, and it’s important that it happens quickly. 

“It’s also encouraging to see that the subscription trap protections will be brought forward. We know that the symptoms of mental health problems such as increased impulsivity and memory problems, can contribute to someone signing up without realising and forgetting about a subscription. We’ve long argued that it should be as easy to cancel a subscription as it is to sign up – and as ever the proof will be in how companies put this into practice. 

“Today’s announcement is good news – however, subscription traps and misleading discounts are only the tip of the iceberg when it comes to unfair practices that make it harder to get a fair deal when you’re struggling with your mental health.

“We look forward to working with the government to see what further action can be taken in future.”

Vets Market Investigation update 

A speech delivered by Martin Coleman, Inquiry Chair for the CMA’s market investigation into veterinary services for household pets at the BVA Congress at the London Vet Show:

Introduction

As an owner of cats and dogs for many years – I currently have a very energetic Sprocker spaniel – I have great respect for veterinary professionals and the care they give, sometimes in very pressured and emotive circumstances. Nothing we have seen or heard in our inquiry so far has caused me to have doubts about the care and professionalism of the vast majority of veterinary professionals.

The focus of our inquiry is not on that but on how veterinary services for pets are bought and sold – whether there are aspects of that process, or the market structure itself, that are not working as well as they might to provide competitive services to consumers

Competition and animal welfare

And competition is important, not only to ensure that clients get good services at fair prices, but to the animals whose health and welfare is rightly at the heart of veterinary practice. In a service that is, in the main, commercially operated, the welfare of animals is closely connected to the means of owners to pay for diagnostics, medicines and treatments. To state the obvious, the health and welfare of animals cannot be effectively protected if owners are unable to meet the costs of doing so. Competitive markets keep prices down and, importantly, incentivise investment and innovation in different treatments and business models. There is a clear connection between protecting the health and welfare of animals and seeking to ensure that markets for veterinary services are working well.

This connection between effective competition and the ability of patients to access clinical services and medicines is perhaps less apparent in the UK than in some other countries because human medical services, for most patients, are available without charge and NHS medicines are provided at standardised prices and, in some cases, free. So clients have no point of comparison when faced with the price of veterinary services and vets have less external context to judge the role of competition in a clinical setting

Context of the investigation

While the provision of veterinary services has, in large part, always been a business, recent developments including increased corporate ownership of vet practices, price rises and questions about the nature and extent of treatments offered have raised questions about whether competition is working as effectively as it might to help contain costs, improve quality and encourage innovation in the interests of consumers and the animals that they own. This was the context in which our market investigation was set up.

We have yet to determine whether such concerns are justified. And, even if they are, we shall seek to understand whether they may be connected. As all good scientists know, correlation is not the same as causation.

There might for example be a causal link between increased corporate ownership and price increases but equally the two may not be connected and there may be other factors at play including a reduction in the number of vets following Brexit and the increase in pet ownership in recent years.

Changes in the nature and intensity of treatment may be an indication of new commercial profit-maximising strategies but may, for example, reflect developments in technology and changing pet owner perceptions of what is best for their animals.

Our job is to get to the bottom of how the market is working – allegations are one thing, hard evidence is another and we are interested in the evidence.

The process

We are now almost a third of the way through our market investigation. Although we have not been able to say much publicly yet, because we are assessing the evidence and forming our views, we have been very busy. It is a long process because we take the responsibility of exploring the veterinary sector very seriously, and we want to base any action we take – or recommendations we make – on a thorough look at the evidence, allowing enough time to engage with key stakeholders including, of course, the veterinary profession.

We have therefore invested a lot of time in engaging with the profession and its clients to get a full picture of how the sector works. We have held teach ins with, and been on site visits to, each of the large corporate groups, as well as site visits at independently owned practices. We have had the chance to talk formally and informally with senior executives and the people on the ground and with representative bodies.

We have held roundtables with veterinary professionals from different backgrounds including the heads of vet schools, chief veterinary officers at charities, vet nurses, students and newly established vets. We have had discussions with consumer groups, animal charities and regulators.

These have been hugely valuable in giving us an understanding of the challenges facing the sector, the complexities of professional life and business, the experience of consumers and the possibilities for change. Thanks to all who have been part of that process. This engagement will continue as we progress the investigation and in particular will include discussions on any remedies we consider may be appropriate to address any concerns we identify.

Gathering evidence, and then analysing it properly and fairly, takes time – particularly in a complex professional setting.

We have requested information from vet businesses (small and large), including on profitability and business strategies.

We are looking at data on prices charged and treatments bought.

We are mapping all the vet practices in the UK and who owns them for every local area. We have commissioned research – both interviews with veterinary professionals and a survey of pet owners.

We are seeking to understand how the medicine supply chain impacts consumer prices.

We are reviewing the relationships between first opinion practices and referral services and out of hours services and how this may impact consumers.

Later in the process we shall be holding a number of formal hearings.

We are very aware that this is an area of some complexity, and we shall need to assess all the potential consequences of any interventions we are considering We shall consider how far potential remedies are aligned with our statutory responsibilities, workable for the profession and its clients and contribute to the outcome that we all want – a market where competition works well with consumers getting a choice of good quality services at fair prices and providers receiving an appropriate return for their investment and service.

This is why we place such importance in our process on hearing your views and consulting with the sector, the profession and pet owners as we develop any potential remedies.

I know that such a significant investigation creates uncertainty, although I would remind you that the inquiry is in part a response to concerns that have been expressed about veterinary services, not the cause of those concerns. We have not yet reached any conclusions on how well the market is operating; but whether the eventual conclusions are that all is well, or that there are areas of concern which we would seek to address, I would hope that the result will contribute to the further building of confidence in a profession consisting of hard working dedicated and committed practitioners performing important work.

Regulation

One theme common to nearly all we have spoken to, including the RCVS, is that the regulatory system needs reform to better serve the profession and the public. I used to be a practising solicitor and sat as a member of the board of the Solicitors Regulation Authority, so I know from my own experience that a well-functioning market in professional services requires regulation.

A race to the bottom is not in the interests of animals, owners or the veterinary profession, and it is the job of regulation to ensure that this does not happen. And changes to regulation might help address some of the challenges faced by the sector, for example by widening the range of procedures that veterinary nurses can be authorised to perform – this is something we shall need to think about.

More broadly it is legitimate to ask whether regulation is too lax or too intrusive; its scope too broad or not wide enough; whether there are more proportionate ways of achieving desired outcomes; whether the current regulatory structure is optimal in protecting public interests and whether the regulatory system gives proper weight to the interrelationship between animal welfare, the needs of consumers and the benefits of a competitive process.

These are issues we are considering and will be taken into account in any recommendations on regulatory reform that we make to the government for them to consider taking forward.

Medicines

An example of the interplay between animal welfare, competition, cost and regulation concerns medicines. We have heard veterinary professionals, and their clients, indicate frustration with certain aspects of the way that medicines are supplied, purchased and regulated.

Some of the important issues around medicines we are considering include:

  • the options available to pet owners when buying animal medicines, and how much they know about these
  • the barriers to telemedicine and remote prescribing, for both vets and pet owners
  • the discounts and other terms available to independent vets and larger vet groups from medicines manufacturers and other suppliers
  • the role of generic prescribing
  • the mark-ups on medicines and whether these mark-ups influence consultation fees charged by vets and, if so, what this might mean for competition

We have heard concerns about the high cost of certain drugs licensed for animals compared to the drugs’ human equivalents and about very large price increases when branded versions of medicines for animals have been authorised. We have been told by some vets that they are frustrated by the lack of flexibility in the Cascade, which, among other things, sets out the circumstances in which a human medicine may be prescribed or recommended for animal use.

These are a particularly acute problems for some pet owners, given recent cost of living pressures and the rising costs of caring for a pet. Vets told us that in some cases – and more than they would like – pet owners are not able to afford the drugs with an animal licence and therefore animals are remaining untreated – or even being euthanised – when they could be treated if vets could prescribe cheaper human medicines but they believe that they are forbidden from doing so.

It is not our job to second guess the clinical, scientific and public health judgments of the specialist regulators. We know that there are good reasons for prescribing medicines specifically manufactured for animal use, such as targeted dosing and the supporting pharmacovigilance regime to ensure continued safety. But it is our role to ask whether the regulatory process gives appropriate consideration to competition and the impact of that on consumers and prices (which may have implications for animal welfare). Albeit the view we ultimately take may be that there are parts of medicines regulation that involve expert judgments, and public policy considerations, that are for specialist regulators and elected government to assess.

And there may be things that can be done to improve matters even before we report. Government policy has been that cost alone is not a sufficient reason to move straight to prescribing a human medicine under the Cascade and we respect that. However, might it, for example, be possible for the Veterinary Medicines Directorate and the RCVS (who effectively police Cascade use) to work together to give guidance to vets on circumstances where, if a pet owner clearly cannot afford an animal medicine with the consequence that an animal would go untreated, a vet would be safe to prescribe or recommend a cheaper human equivalent in order to protect the health and welfare of the animal?

Informed consumers and treatment intensity

For the market to work well, consumers must be appropriately informed about the choices they can make when selecting a veterinary practice, whether that be a first opinion practice, a referral centre or an out of hours service, and when considering diagnostic options and treatments.

This is not just a matter of cost but also because, in similar circumstances, each owner will have their own views about what is best for their pet, and each vet and practice will have distinct capabilities. We are considering whether the information consumers have at different stages of their animal care journey facilitates good decision-making and how far pet owners are in a position to act on those decisions.

This does not mean that dealings between a vet and client are, or should be, purely transactional. Relationships, trust and confidence matter, and we have heard this consistently from vets and clients. But this is not an either/or debate – appropriately informed consumers making choices versus trusted relationships. The two are connected. Trust can be built and retained if consumers know that their vet, and the recommendations the vet makes, are the best for them in their particular circumstances.

We have heard about the increasing sophistication in diagnostics and treatments. There is a debate around how best to handle the challenge of ensuring that pet owners are properly informed at the right time about the choices available while receiving appropriate guidance and support on sometimes very complex options. One approach that has been much discussed is contextualised care, to tailor what a vet offers to the specific needs of the pet and its owner.

A number of vets have told us that contextualised care is a new term for what good vets have always done. Others have said that it is a valuable new focus for good practice. We have also been told, by vets who work in the charity sector, about pragmatic care, which can be thought of as aiming to capture much of the benefit of the increasingly sophisticated treatments available at a reasonable cost.

We are looking into these trends in diagnostics and treatments and what they mean for competition, pet owners and animal welfare.

Conclusion

What happens next? We’re preparing a series of (what we call) working papers, where we set out the evidence we have gathered so far and our initial analysis of what this shows. These will be published in a few months and will give interested people and businesses a chance to see how our thinking is developing and the opportunity to comment.

We are expecting to publish our provisional conclusions in early summer next year, when we shall be consulting on what we have found and what we are considering doing about it. This might include making orders that are directly binding and recommendations for change which would be for others to consider and implement.

As I said we are very keen to get the views of the profession on the topics we are considering and, in that spirit, I am looking forward to hearing the panel discussion during the second part of this session.