Research and Statistics

Online sales are fastest-rising cause of consumer complaints, report says


Internet sales are the fastest-rising consumer gripe, according to a Consumer Federation of America report. Credit cards remain the safest way to pay on the web, the report also found.

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Internet sales were the fastest-growing consumer complaint in 2017, a report from the Consumer Federation of America said Monday, and credit cards remain the safest way to buy online.

“Using a credit card is the safest way to pay for online purchases because federal law gives you the right to dispute the charge within 60 days” of receiving the bill, the consumer group’s report said.

The credit card chargeback process can use the card issuer’s leverage to obtain a refund for your purchase if negotiations with the merchant are unsuccessful.

Among the targets of complaints in 2017 was an online retailer, eRummagers, that consumers said failed to deliver prepaid merchandise. North Carolina consumer protection authorities investigated and sued one of the company’s principals.

How to protect yourself from merchandise sales problems using a credit card

  • Look for merchants that promise delivery within the 60-day window.
  • Contact your card issuer if there is a delay in shipping or other problems.

See related:Chargebacks and how to dispute a credit card purchase

When event sales are not delivered

In Georgia, online companies called Spot Reservation and Rushcube promised recreational experiences such as skydiving, hot air balloon rides and helicopter tours, then failed to reserve the events or booked them in distant locations, consumers said.

The state consumer protection unit is seeking a permanent injunction against the companies, as well as restitution and civil penalties, according to the report.

How to protect yourself from event sales problems

  • Read the terms and conditions to see if the seller is a middleman or the direct provider.
  • Look for ways to confirm the booking with the provider.
  • Look for reviews and complaints online about the seller before purchasing.
  • Check for a refund process.

See related: 8 tips to keep your credit cards safe while shopping online

Bedding company makes puffed-up claims

Ads in subway cars in New York City promised $20 off on luxury bedding purchases online for using the promotional code “subway,” but investigators found the deal was only good for transactions of $100 or more, the report said.

The company paid a $25,000 fine and agreed to remove the minimum purchase requirement while the ads remained in subway cars.

“Advertising should be truthful and tell you the important things you need to know about the offer,” the report said. If not, you can make a complaint about misleading ads to state or local consumer protection authorities.

“Using a credit card is the safest way to pay for online purchases because federal law gives you the right to dispute the charge within 60 days.”

Problems with online sales run the gamut

Other complaints highlighted in the report included an online company that promised custom decorations for weddings and parties, but didn’t come through in time for the events, and a pet seller that asked for money order payment, then failed to deliver.

“One telltale sign [of a scam] is if you’re asked to send your payment via a money transfer service,” the report said. “Legitimate businesses don’t ask for payment that way, but fraudsters do because they can get the cash fast and it’s hard to trace them.”

The consumer federation’s report is drawn from 40 state and local consumer agencies around the U.S. Agencies that cover a single issue such as insurance or banking are excluded.

The 38 agencies in the survey with data on complaints heard from 908,595 consumers and saved or recovered $2 billion through mediation, lawsuits and other actions.

“Consumer complaints are vital to the work of consumer agencies to protect others,” said Sheryl Harris, director of Cuyahoga County (Ohio) Department of Consumer Affairs during a press call Monday.

“One telltale sign [of a scam] is if you’re asked to send your payment via a money transfer service. Legitimate businesses don’t ask for payment that way, but fraudsters do because they can get the cash fast and it’s hard to trace them.”

Credit issues also made list of complaints

Credit and debt issues were the fourth most frequently cited issue in 2017, the report said. The category includes credit repair, debt relief services and illegal or abusive debt collection tactics.

Looking ahead, the report flagged the practice of using electronic devices to obtain signatures on contracts as an issue that may generate more problems down the road.

“The problems include consumers not being given the opportunity to scroll through the contracts in order to see the terms and conditions,” the report said, “and not being provided with their own copies.”

The CFA is a group of more than 250 nonprofit consumer organizations formed in 1968.

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