The Competition and Markets Authority (CMA) has fined three businesses a total of £6 million for using misleading sales practices. It has also secured approximately £440,000 in consumer redress.
This action settles three more of the first eight cases which the CMA opened in November last year using its enhanced consumer protection enforcement powers under the Digital Markets, Competition and Consumers Act 2024 (DMCC Act). Four of the other cases were settled earlier this year, with fines of more than £12 million and redress of £2.4 million for affected customers. The final investigation from the original group, against Viagogo, is still ongoing.
The three cases cover slightly different breaches of consumer law. The Wayfair case concerns misleading time-limited offers and Appliances Direct was found to have used both false urgency and automatic opt-ins to paid extras. The Gold's Gym case concerns price transparency, which has been at the heart of the CMA's guidance and enforcement drive under the new regime. The CMA has issued guidance on all these topics.
All three businesses chose to settle the cases against them. Settlement requires constructive engagement with the CMA and admission of wrongdoing. In return, each business received a 40% reduction in its fine.
Wayfair: time-limited offers
The CMA's investigation found that Wayfair advertised products through 'Daily Deals' and 24-hour 'Flash Deals', alongside messages such as 'Here Today, Gone Tomorrow' and countdown timers. These features implied that customers needed to act quickly to secure the best price. However, many products remained available at the same price or a lower price after the stated deadline, meaning that the offers were not genuinely time limited. Presenting them as one-day offers could have pressured customers into buying quickly for fear of missing out. Wayfair must pay a penalty of £4.8 million.
Appliances Direct: time-limited offers and pre-ticked checkboxes
The CMA's investigation found that Appliances Direct automatically opted customers into one or both of the following services:
- 'Remove & Recycle Your Old Appliance': removal of the customer's old appliance at the time of delivery, followed by recycling
- 'Installation on Delivery': installation of the new appliance at the time of delivery
Consumer law requires businesses to obtain customers' express agreement before charging for optional extras. Pre-ticked boxes and other forms of automatic opt-in are not permitted. The CMA has published guidance to help businesses understand these requirements.
Appliances Direct also displayed pop-up countdown banners on some product pages, claiming that discounts of £10 to £25 were available for a limited time. The CMA found that the same discount codes reappeared over many days, potentially placing unfair pressure on customers to buy an appliance.
The CMA fined Appliances Direct £1.2 million and is requiring it to pay around £432,000 in refunds to customers affected by the automatic opt-ins. The average payment will be £25 per customer.
Gold's Gym: mandatory joining fee
The CMA found that Gold's Gym, a UK franchise operating four gyms in London, failed to include the joining fee in the total price shown to consumers for annual and Direct Debit memberships. In other instances, the total price was presented unclearly or in a way that consumers were unlikely to see.
The CMA emphasised that the DMCC Act requires businesses to show customers the total price, including all mandatory fees, clearly and from the outset. Gold's Gym was fined £45,000 and must refund a total of £9,220 to 726 affected customers. Each customer will receive either £50 or £10, depending on their membership type.
What next?
The CMA continues to investigate other businesses' compliance with the DMCC Act. Businesses should review their customer journeys, promotional practices and price presentation to make sure that:
optional extras require express consent;
time-limited offers are genuinely time-limited; and
mandatory fees are included in the total price from the outset.
If you need support reviewing your customer journeys or pricing practices, or if you would like a copy of our latest Consumer law report, please consult our Consumer Law Hub or contact a member of the team.
