Online services attract the most complaints

  • 24/09/2015

Online services and transactions attract the most complaints from consumers but many overseas sellers are difficult to police, the Commerce Commission says in its annual Consumer Issues report.

Growth in online sales has outpaced growth at traditional bricks-and-mortar outlets, with online transactions now making up at least six percent of core retail sales, the trade practices regulator says.

Of the 4377 Fair Trading Act complaints the commission received in 2014, a third concerned online traders, twice the number generated by physical stores.

The majority of complaints related to domestic online traders, with only 13 percent involving international traders, the regulator said.

It could take action against locally based traders but overseas traders posed a problem. Some wouldn't respond to the commission or would ignore its advice, the commission said.

The basis of the online trading complaints was evenly split, with 26 percent related to either the quality or advertisement of the goods while 24 percent of online complaints concerned misleading pricing, including complaints over "drip pricing", where a headline price failed to include additional charges.

A further 20 percent of complaints related to the provision of online services while nine percent related to non-delivery or the delivery timeframe.

Of the remaining complaints the commission received under the Fair Trading Act, 28 percent concerned contracts and invoices, which were specific to individual traders, rather than indicative of a wider industry behaviour. It said the most significant contributor to this was the Auckland Academy of Learning, which had featured on TV3's Campbell Live programme, selling high priced educational software.

Only 14 percent of all the fair trading complaints the commission received in 2014 concerned in-store trading.

Key sources of complaints were Dead Sea Skincare and supermarket operator Progressive Enterprises, the commission said.

The competition watchdog's report for 2013 didn't consider Progressive had engaged in deceptive or misleading behaviour, having received almost 90 complaints from suppliers that led to investigations into potential breaches of the Fair Trading and Commerce Acts.