UK's Burnham vows crackdown on misleading discounts and subscription traps

LONDON, Aug 9 (Reuters) - Britain's new Prime Minister Andy Burnham said on Sunday he would crack down on misleading product discounts and subscription traps as part of a broader push to ease pressure on household finances.

Burnham wants to deliver improvements in living standards after a decade marked by unprecedented political instability, during which Britain had seven prime ministers and households saw little improvement in their spending power.

Since taking power on July 20, Burnham has removed a tax from domestic electricity bills, capped bus fares and lowered business rates for pubs, clubs and live music venues, eager to show that he can act more decisively than his predecessor Keir Starmer.

RETAILERS' MISLEADING PRICING CLAIMS TO BE BANNED

He plans to ban retailers from making misleading claims to shoppers about discounts, which make savings look larger than they really are.

The government will launch a consultation to assess whether tactics such as fake claims about previous prices, invented discounts and misleading recommended retail prices should be added to the list of practices banned under existing legislation.

However, the British Retail Consortium, which represents most major retailers, including Tesco, Sainsbury's and Marks & Spencer, played down the extent of the current problem. "BRC members adhere to all rules and regulations on promotions, ensuring consumers benefit from genuine savings on the discounts offered," Tom Ironside, its director of business and regulation, said.

Burnham also wants to see an end to subscription traps, where people find it hard to cancel their subscriptions and contracts are automatically renewed at a higher cost.

New rules from January 2027 will mean businesses will need to provide clearer up-front information, regular reminders and a much easier exit to contracts. A new 14-day cooling-off period will also let consumers cancel after a trial or long-term contract renews.

"Today is just the start," said Burnham, promising more measures would follow.

(Reporting by James Davey; Editing by Toby Chopra and William James)