Navigating the new UK Consumer Protection Regime: a legal guide for SMEs

Earlier this month, on 6 April 2025, the UK’s consumer protection landscape underwent a significant change as a result of the introduction of the Digital Markets, Competition and Consumers Act 2024.

This doesn’t just impact big or multinational companies. SMEs, particularly those operating in e-commerce, retail, and digital services, need to pay close attention to the new UK consumer protection regime.

Below, we break down some of the key developments, outline legal risks and offer some practical guidance to help SMEs remain compliant under the new rules.

1. Why does this matter for SMEs

The new consumer protection regime gives the Competition and Markets Authority (CMA) enhanced enforcement powers and it introduces tougher rules around matters such as price transparency, subscription traps, fake reviews and online selling practices.

This isn’t the first time that these practices have been the subject of legislation, but breaches can now result in direct financial penalties of up to 10% of turnover without the CMA needing to go through lengthy court proceedings.

Keep points to bear in mind:

• Digital-first businesses will be a primary focus for enforcement.
• Ignorance of the law will not be a defence.
• The CMA has made clear that it will be targeting misleading practices, even those conducted by smaller businesses.

2. Clearer pricing: no more of what is known as “Drip Pricing”

The new law takes aim at “drip pricing”. This is the process by which additional fees (e.g., delivery, booking, or admin charges) are revealed late in the consumer’s purchasing journey.

What are the legal requirements:

All mandatory charges must be disclosed upfront as part of the advertised price, not added at checkout. The key things your business should consider include:

• Auditing your checkout process to ensure total costs are displayed before a customer hits the buy it now button.
• Ensuring that all fees, taxes and surcharges are transparent and itemised.
• Ensuring that your website terms and pricing pages reflect these changes.

Notwithstanding the CMA’s initial focus, bear in mind that this isn’t just about digital businesses. If you deal with consumers and charges are not transparent, your business could still be affected.

For example, a roofing company that adds an unexpected scaffolding access surcharge to an invoice or a gardening business that levies an unforeseen waste removal bag charge on their bill could both be exposed to risk.

3. Subscription models: tighter rules for renewals and cancellations

Many of us (in our capacity as consumers) will have signed up for that free trial subscription, only to forget to cancel it until many months after we planned to do so.

Under the new regime, recurring subscription services (including software, gyms, or product deliveries), are subject to new obligations around sign-up clarity, reminders and cancellations.

Key things to consider:

• Ensure that you provide a clear summary of the key terms of the subscription before sign-up.
• Issue a reminder email before the end of free trials or the beginning of auto-renewals.
• Enable simple cancellation methods, ideally in a single click.
• Use an intuitive account management dashboard where users can easily modify or cancel subscriptions.

4. Fake reviews and misleading endorsements

Under the new rules, publishing, facilitating, or incentivising fake reviews by consumers is now explicitly banned. This includes posting false positive reviews, failing to verify the authenticity of published reviews and editing or suppressing negative reviews to mislead customers.

Some of the best ways to avoid the risk of falling foul of these rules include:

• Only using verified systems for collecting reviews (such as Trustpilot or Tripadvisor).
• Avoiding offering discounts or incentives in exchange for positive feedback.
• Monitoring third-party platforms and flagging suspicious review activity.

5. The CMA’s New Enforcement Powers

One of the biggest shifts resulting from the new legislation will be procedural. The CMA will now have direct powers to enforce consumer law, along with issuing fines and imposing undertakings on businesses. This is possible without needing to go through the courts.

The result of this change will mean that regulatory action will be faster and (as such) potentially more frequent. This could lead to businesses facing increased exposure to penalties and the impact of reputational damage and it’s important that businesses prepare for spot checks, audits, or compliance notices.

6. Building a compliance strategy

Staying compliant with the new regime will mean embedding consumer rights into your business processes.

Our recommendations include the following:

• Review your terms and conditions, along with your website content and your checkout flow.
• Conduct a compliance audit on any subscription offerings and marketing practices.
• For those with dedicated customer service and marketing functions, train your teams on the new rules.
• Document your efforts in relation to compliance. These records may be very valuable if your business is investigated.

7. Sector-specific tips

For those businesses engaged in retail and e-commerce, you should pay close attention to delivery fees, discount pricing and return policies. For businesses in the hospitality and events sector, be transparent about service charges and non-refundable deposits. For digital services be clear on free trials, renewal dates and cancellation options.

What’s next?

As stated above, the CMA has indicated it will focus on digital markets and misleading practices, with SMEs not exempt from scrutiny. While larger companies are likely to grab the headlines, smaller businesses are often where enforcement starts, particularly if complaints surface.

In future, businesses can expect more guidance notes, compliance tools and sector-specific codes and SMEs should stay informed. Many will treat this as an opportunity to build trust with their consumers.

By reviewing your practices now and making compliance part of your day-to-day operations, you can reduce your legal risk at the same time as strengthening your brand reputation.

How Morr & Co can help with the new UK Consumer Protection Regime?

If you have any questions or would like any further information on the content of this article, please do not hesitate to contact our Corporate and Commercial team on 01737 854500 or email info@morrlaw.com and a member of our expert team will get back to you.

Disclaimer
Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.