Online is the most complained about sales channel

Commerce Commission publishes Consumer Issues Report 2016/17

Online sites were the sales channel most complained about by New Zealanders in the past year, accounting for 42 percent of the total, with the bulk of complained about sites (85 percent) being NZ based, according to figures released by the Commerce Commission.

The commission has just published its Consumer Issues Report 2016/17 that provides detailed analysis of the 7,270 complaints the Commission received during the financial year.

The level of complaints seems to have done little to dampen New Zealanders’ enthusiasm for online shopping. The commission cites The Bank of New Zealand Online Retail Sales Report, which shows that New Zealanders’ total online spend grew for May 2017 was 14 percent up on May 2016, reaching $350m.

The commission said consumers had complained about difficulty in determining (often after a purchase has been made) whether the trader had represented price, goods or services accurately, especially as online pricing can appear substantially cheaper when compared to traditional bricks and mortar retail stores.

“It is evident from some complaints that consumers have subsequently had doubts about whether they purchased from a legitimate trader, particularly if the trader is based abroad and the consumer has been unable to make contact with the trader to resolve concerns about product delivery or quality,” it said.

It added: “Other complaints indicate that the price of goods can be easily misrepresented by online traders using a non-specific currency at check-out, subscribing consumers to monthly subscriptions which are hidden in fine print, or adding unexpected additional costs such as booking fees.”

It noted that travel and tourism booking agents (mostly trading exclusively online) generated an increasing number of complaints in 2016/17. “Consumers complain about being misled about the quality and/or nature of travel services such as accommodation booked online.”  

Providers of online loan services also generated consumer complaints. The commission said complaint narratives indicated that lenders using text and/or online forms for loan applications did not always reassess the circumstances of the borrower for repeat borrowing and ‘top-ups’.

The commission also noted the increasing number of complaints about online ticketing sites, and allegations that consumers had been unable to use tickets for events purchased through these platforms.

“Excluding major events designated by the Ministry of Business, Innovation and Employment, it is not illegal in New Zealand to resell an event ticket for a higher price than the face value,” it said. “However, the Fair Trading Act requires that the representation of goods (including event tickets) is accurate.”


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