New Consumer Protection Laws May Impact Travel Businesses

The past couple of years in travel has proved just how fast things can change for travel. Now, more than ever, consumer protection is very important, not just for smooth and efficient operations in many situations, but for great consumer confidence. Of late, the government have been giving some attention to consumer protection laws and are planning a few changes. Some of these changes are worth keeping an eye on as they could affect businesses in the travel trade.

In some cases, these changes may target travel businesses more directly than other industries, with changes to operations in prepayments and dark patters possibly leading to further action for enforcers on certain practices.

These are not concrete changes as of November 15th, 2021, but we highly recommend keeping up to date as the government is considering some of these changes. Consumer protection is a top priority for Protected Trust Services (PTS) and its members, these new consumer laws may not affect any PTS members, but it could be important for consumers to be made aware of harmful practices that could affect their booking.

Buying and Selling Fake Reviews

The government is taking into consideration the industry surrounding buying and selling fake reviews. They have stated that both the selling and purchase of fake reviews is damaging, not only to the consumer, but to honest businesses. The use of fake reviews by one business could affect consumer confidence for other businesses.

Though the sale of fake reviews may not affect travel, some businesses buying or commissioning fake reviews could affect other businesses alongside the consumers. To combat this, the government plan to:

• Prohibit businesses from commissioning consumer reviews, or commissioning fake reviews; and
• Prohibit businesses from hosting consumer reviews without ensuring they are genuine reviews.

The assurance that the reviews a consumer is reading are genuine can go a long way for consumer confidence, allowing consumers to get an understanding of the quality of service a business provides before booking. It would also give a great boost to the reviews that consumers do write.

The Prohibition of ‘Dark Patters’

‘Dark patters’ consist of methods used by businesses on e-commerce platforms to guide a consumer into making choices or decisions that they may not have chosen otherwise. These decisions could potentially be harmful to the consumer and give a huge hit to consumer confidence in the sale of specific products.

Dark patters could consist of, but are not limited to:

• The use of countdown timers – applying pressure by giving a consumer a limited amount of time to complete the purchase,
• Suggesting that the product is likely to become unavailable – this could be through the consistent use of a ‘limited time offer’ or permanently displaying products under a discount, applying pressure by suggesting that the product is limited, etc.,
• Drip pricing – wherein a business’s site displays only part of the price initially, but through the checkout process increases the price through necessary add-ons, tax costs, and other things that are a necessary part of the purchase but not displayed until the consumer is checking out.

Drip pricing is an area that enforcers have taken more focus on surrounding travel businesses. The use of drip pricing is considered misleading, unfair, and potentially harmful to consumers by not including all necessary parts of the product in the headline price, hence the focus. It is the one of these practices that is most commonly encountered in travel.

The government are looking to reinstate and strengthen the consumer protection laws already in place surrounding dark patters so enforcers can take further action against these practices.

They also want to tackle ‘fairness by design’ principles on the e-commerce sign. This will be to ensure that business’s websites are designed with fairness to the consumer in mind from the get-go.

Next to this, the government intend to address search results on a business’s website. This will specifically target results influenced by third parties who want to have their services featured in the search results. In these cases, the government would like to see these results clearly labelled as advertisements to the consumer.

Stronger Prepayment Protection

The government intends to introduce further consumer protection laws that will require certain types of prepayments to be ringfenced. Essentially meaning that if the business providing the service fails, then the prepayment monies will be returned to the consumer.

Specifically, the government are considering doing this by protecting prepayments in savings clubs either through insurance or trust accounts. The further use of trust accounts for financial consumer protection in travel is a great prospect and will be a fairly simple adjustment to make for PTS members if the government do decide on this method of protecting prepayments.

This will be one to look out for as a travel business as it could affect the processing of holiday bookings and specifically accommodation bookings, but the specifics of this have yet to be decided.

However big or small the change is, ensuring compliance with consumer protection laws in travel (usually falling under the Package Travel Regulations) is a key guarantee from PTS and our members to the consumers. These changes may only require small or no adjustments for some travel companies, and it’s great to see the government taking steps to ensure consumer confidence.

If you would like to learn more about the consumer protection, we provide through our members at Protected Trust Services, please contact us at 0207 190 9988.

Or if you’d like to find out how we provide complete financial protection through travel trust accounts for our members and their consumers, you can learn more on our pages.