The current UK consumer protection regime relies on a variety of different pieces of legislation – for example, the Consumer Rights Act 2015, the Consumer Protection from Unfair Trading Regulations 2008, the Consumer Credit Act 1974, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, to name a few. The regime is enforced by a number of public authorities whose powers are limited: 

• consumer protection rules include a general prohibition on unfair commercial practices, misleading acts and omissions. They do not specifically refer to some of the latest problematic practices, such as subscription traps and fake reviews;
• in the absence of cooperation (for example through voluntary undertakings from individual businesses as to their future practices), regulators such as the CMA need to take individual businesses to Court – for example to request an order to cease particular conduct or even to compel a business to provide information; and
• public authorities cannot impose fines under the current consumer protection regime, which limits the financial repercussions of consumer law breaches for businesses.

The DMCC Act 2024 brings in both changes to the substantive consumer protection legislation, and more importantly from a business risk perspective, changes to the way in which public authorities can enforce the law.

UK consumer protection legislation will be updated and adapted to better address current challenges:

• the Consumer Protection from Unfair Trading Regulations 2008 will be repealed, for its provisions to be embedded within primary legislation;
• further business practices will be explicitly covered under the legislation, including subscription contracts which will be subject to minimum requirements to ensure these are fairer to consumers;
• all sources of consumer protection will conveniently be listed within one of the DMCC Act's 2024's Schedules; and
• the Government will have the power to add more practices to the existing list of automatically unfair commercial practices via secondary legislation.

From an enforcement perspective, the DMCC Act 2024 will introduce a new administrative route enabling the CMA to directly enforce against breaches of consumer law. Timings are to be confirmed via secondary legislation once a new Government has been appointed, but we currently expect the relevant provisions to come into force around Autumn 2024. From then, the CMA will have extensive powers to:

• investigate potential breaches (including by way of unnanounced inspections) and impose fines on businesses when they fail to co-operate with the investigation; and
• issue infringement notices, impose sanctions and award compensation at the end of an investigation. 

The below summarises the maximum fines which the CMA may impose on businesses and individuals respectively:

• Breach of consumer protection law: Businesses can receive up to 10% of their global turnover and individuals can receive up to £300,000.
• Failure to co-operate with investigation/ comply with a CMA information request: Businesses can receive up to 1% of turnover and/or daily fine of up to 5% of daily turnover. Individuals can receive up to £30,000 and/ or £15,000 daily penalty.
• Failure to comply with a CMA direction: Businesses can receive up to 5% of global turnover and/or daily fine of up to 5% of daily turnover. Individuals can receive up to £150,000 and/or 15,000 daily penalty.  

The DMCC Act 2024 will also introduce powers for other enforcers (such as weights and measures authorities and other public and private bodies) to seek orders from the courts where consumer law breaches are occurring.

The DMCC Act 2024 is a sea-change in risk and enforcement terms, particularly for Retail & Consumer clients. In addition to the existing risk of consumer complaints and negative publicity, consumer-facing businesses and individuals will soon face additional risks of: 

• official requests for information and unannounced inspections in the course of CMA investigations into potential consumer law breaches, with substantial fines for non-compliance;
• administrative fines of up to 10% of global annual turnover (businesses) and up to £300,000 (individuals) for breach of consumer law; and
• consumer compensation awards.

The existence of CMA infringement decisions may also increase the risk of litigation proceedings seeking damages for losses arising out of the breach.

Clients have a small window in which to ensure that their consumer practices are in order and to ensure that they have appropriate risk management and investigation response procedures in place.