UK regulator raises the heat on errant online sellers

London:

Britain’s most popular online retailers have been told by the consumer watchdog to improve their transparency on pricing as the Christmas rush approaches.

The Office of Fair Trading said some of the biggest “etailers” were still not being fully honest with consumers on the ultimate price they will have to pay for goods or services — often adding delivery charges or other fees that were not disclosed until final purchase.

While 60 per cent of websites under scrutiny told customers that charges would be added, 24 per cent of these same sites then went on to add further, unexpected costs, the OFT said. This was little changed from a similar study last year.

Persistent offenders could face an unlimited fine or prison if they refused to improve their practices, the regulator pointed out. The OFT has written to 62 etailers after its study of 165 sites found deficiencies. The watchdog was also concerned that unreasonable demands were being put on consumers, such as refunds being available only for products still in their original packaging, which inhibits customers’ ability to inspect purchases.

The findings come as retailers are gearing up for the pre-Christmas season. Online shopping is taking an ever-increasing share of retail, accounting for 9 per cent of total sales in the UK in 2011, according to the British Retail Consortium. The UK has the highest online spending per head in the world, with 11 per cent of the world’s internet retail sales.

“Developing trust in online markets is a priority for the OFT in light of market trends and evidence about the issues most affecting consumers and business,” said a spokesman for the watchdog.

The regulator’s study looked at sites with the most users — meaning that most are established retailers.

“The real challenge for the OFT in this arena of developing regulation is catching the online rogues,” said Richard Braham, head of multi-channel retail at the BRC. “For mainstream retailers, it’s in our interest to have a positive relationship with consumers, but there are a lot of online rogues out there.”

The OFT — which is due to be merged into a wider Competition and Markets Authority in 2014 — has launched other investigations into online markets. It told InterContinental Hotels Group, Expedia and Booking.com in July that it had found potential anti-competitive practices in their online booking policies. The companies deny the allegations and the inquiry continues.

“It’s good to see OFT continuing work in areas that actually matter to the public,” said Alastair Mordaunt, a former OFT official who is now with the Clifford Chance law firm. “Given its compliance work in this area — such as the launch of a training and guidance ‘hub’ to assist web sellers — the OFT may take the view that there’s no excuse for some of the more common breaches, in which case we would expect to see a harder line on enforcement.”

- The Financial Times