New consumer protection laws: 10% turnover penalties, and how to avoid them

Radical changes in the enforcement of consumer protection law came into force on 06 April 2025 under Part 4 of the Digital Markets, Competition and Consumers Act 2024 (“the DMCCA”).

The DMCCA creates new consumer protection offences and gives new and heavy-weight enforcement powers to the Competition and Markets Authority (“the CMA”).

New offences

First, it is worth remembering that any act or omission by a trader relating to the promotion or supply of a product to or by consumers is a “commercial practice” covered by consumer protection law. So, commercial practices include advertising and after-sales services as much as the actual sale and supply of products.

As under the previous regime, misleading consumers or behaving aggressively or otherwise acting unfairly towards consumers, if likely to cause the average consumer to take a transactional decision that the consumer would otherwise have not taken, is unfair, and therefore illegal.

Also, certain practices are automatically unfair.

The old “banned practices”, such as pressure selling, remain.

A new banned practice of fake reviews is introduced. A trader must not write or ask another to write a fake consumer review or a review which does not disclose incentivisation. A trader must not publish reviews in a misleading way – which captures removing bad reviews. Publishers can also fall foul of the new law if they fail to take steps to check reviews are not fake or fail to remove them on being notified that reviews are fake.

The omission of material information that must be contained in an invitation to purchase is also automatically unfair.

An “invitation to purchase” is the provision of information to a consumer which indicates the characteristics of a product and its price, and which enables the consumer to decide whether to buy or take another step in their consumer journey. Some examples would be a product with a price tag in a shop or an online market listing.

“Material information” includes the total price, including any fees, taxes, charges or other payments connected to the purchase.

The material information must be included within the invitation to purchase or its context, or if space does not permit, in an immediately accessible way, such as a link to a website.

Drip pricing – the practice of showing consumers an initial headline price for a product and subsequently introducing additional mandatory charges – is prohibited.

New rules about subscriptions will come into effect in 2026.

Conscious that there are many concepts and definitions in the DMCCA which need to be clearly understood by traders to avoid breaking the new laws, the CMA is issuing guidance on its website.

It is important to understand what exactly is required under the DMCCA as enforcement is considerably changed too.

Enforcement of the new laws

Previously, traders who carried out unfair, misleading, aggressive or banned commercial practices were generally dealt with by Trading Standards.

Trading Standards could prosecute offenders in the criminal courts and/or – less frequently – obtain an injunction in the civil courts.

Trading Standards retains those powers.

DMCCA gives the CMA new powers.

Through the civil courts, the CMA may seek several types of orders.

The CMA may also “directly enforce” certain infringements.

Direct enforcement includes investigating allegations, which can include dawn raids, and demanding information be handed over by companies on pain of financial penalty.

The CMA can also issue a Provisional Infringement Notice (“PIN”) which sets out the CMA’s view that a company has infringed DMCCA and gives an estimate of a fine to be directly imposed by the CMA. The recipient then has a short time to respond. The scope for appeal of a PIN once finalised is very limited.

The CMA can also prosecute in the criminal courts.

Importantly, the CMA and the criminal courts can now impose fines of up to 10% of global turnover.

The introduction of PINs and the dramatic increase in fines should concern all traders.

The CMA has indicated it will work with companies rather than against them until the end of June 2025. After that, we expect to see an increase in enforcement activity, particularly in the areas of online sales where there is a perception of higher risk of misleading consumers due to online choice architecture, choice overload, decoys and sensory manipulation.

The DMCCA is a complex piece of legislation, and we anticipate that many traders (or their marketing teams) will simply get things muddled. The first thing the trader may know about this is when it receives a PIN suggesting a very high fine indeed.

Business leaders are advised to make themselves familiar with the new consumer protection laws to avoid breaking them. If businesses receive PINs, they need to act quickly, seeking legal advice if necessary.