A Leicester name has just become the textbook example of how not to run an online checkout. On 18 June 2026 the Competition and Markets Authority announced that Marks Electrical, the AIM-listed online electricals retailer founded in Leicester in 1987 by Mark Smithson, had been fined and ordered to refund nearly 40,000 customers after automatically opting them into paid add-on services they had not agreed to buy.
As a Leicester solicitor who acts for owner-managed businesses, I read this one closely. The numbers are eye-catching, but the lesson underneath them applies to almost every business that sells anything through a website.
What actually happened
The CMA found that when customers bought appliances such as washing machines, dishwashers and cookers through the Marks Electrical website, they were automatically opted into one or both of two paid services: a “Recycle Old Appliance” service and an “Unwrap & Recycle Packaging” service. Customers were charged for these without having given express agreement to them. The checkboxes for each was pre-ticked.
The headline penalty was £1.2m, reduced to £720,000 after a 40% settlement discount for admitting the breach and resolving the matter early. On top of the fine, the company has been ordered to refund around £600,000 in total to affected customers, with an average payout of roughly £15 per person. Customers do not need to do anything – Marks Electrical is contacting them directly and refunding to the original payment method where it can.
To its credit, the company stopped the conduct as soon as the investigation opened, engaged constructively, and has told the stock market it has overhauled its checkout and compliance processes. The penalty is being met from existing cash and treated as an exceptional item. This is a reputational and operational headache rather than a solvency event – but it is still a headache nobody wants.
The law in plain terms
Two pieces of law are doing the work here.
The first is the prohibition on charging consumers for extras without their express consent. Opting a consumer into an additional payment under a contract without obtaining their active agreement is prohibited by regulation 40 of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. Pre-ticked boxes do not count as consent. The consumer has to choose the extra, not be defaulted into it and left to notice and untick it.
The second is the enforcement muscle. The CMA used its powers under the Digital Markets, Competition and Consumers Act 2024 to impose the penalty directly. Since April 2025 the CMA can decide that a business has breached consumer law and fine it itself, without going to court first. It can impose penalties of up to 10% of global turnover. The Marks Electrical case is one of the first round of enforcement actions under these powers, and the CMA has been clear that more are coming.
Why this should worry more than just large retailers
It would be easy to read this as a big-retailer story, but it is more than that. The behaviour the CMA pulled apart – a default-on paid extra at checkout – is everywhere. Insurance add-ons, “priority” processing, extended warranties, packaging or recycling services, charity round-ups that default to on, subscription tick-boxes pre-selected to the annual plan. If money changes hands and the customer did not actively choose it, your business is exposed.
The old enforcement model gave smaller businesses a degree of practical cover, because the CMA had to litigate and tended to pick its battles. That cover has gone. Direct fines change the economics of enforcement, which means the regulator can act on conduct that previously was not worth the court time.
What I would advise if you sell online
Here are a few practical steps, in the order I would take them:
- Audit your checkout for anything pre-selected that costs money. Every add-on, every upsell, every optional service. If it is ticked by default and carries a charge, change it now. The fix is usually a development afternoon, not a project.
- Make optional extras genuinely optional. The safest design is opt-in: the box starts unticked and the customer chooses to add it. Bundling an extra into the headline price and presenting it as inclusive is a different and more defensible model, but only if the customer is clearly buying the bundle.
- Check your subscriptions and renewals too. The DMCC Act also brings in tighter rules on subscription contracts, reminders and easy exit. Pre-ticked boxes are the obvious target, but the direction of travel is broader.
- Keep the evidence. If you can show the customer actively selected an extra – a logged click, an unticked default – you have a defence. If your records cannot show consent, assume a regulator will read the ambiguity against you.
The takeaway
The reason Marks Electrical engaged early and settled is the same reason every business should treat this seriously: once the CMA has decided you are in breach, the discount for cooperating is the only lever left to pull, and the conduct itself is rarely defensible. A pre-ticked box is not a clever bit of conversion optimisation. Under the current regime it is a fineable breach of consumer law.
If you run an online checkout and you are not certain every paid extra is genuinely opt-in, that is worth half an hour of someone’s attention this week. It is a great deal cheaper than a £720,000 fine and a whole load of refunds!
About Steven
Steven Mather is a business law solicitor based in Leicester. I help small and medium-sized businesses with a wide variety of legal issues, including terms and conditions for online e-commerce sites.
