Let Your Fingers Do the Pointing
Who's Accountable When Online Orders Don't Arrive
Robertson Barrett
Special to Consumer Reports WebWatch
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Online marketing companies are making it easier for people to start e-commerce businesses out of their homes. But as an increasing number of consumers are unfortunately discovering, these mom-and-pop operations often lack appropriate business training and clear commerce standards. When merchandise isn't delivered or other problems arise, consumers are the ones who pay the price.
Mary Ann Coulihan, a London, Ontario resident, helped her mother shop for Christmas gifts for her two sons last December. The boys liked two different hockey teams – the Colorado Avalanche and the Buffalo Sabres – and Coulihan went online to search for memorabilia. She discovered 4-fans.com, which called itself "The Ultimate Team Super Store!" with "sports team merchandise for every pro team." She ordered two team logo wastebaskets and says her MasterCard was promptly charged $50.96.
Christmas came and went, but Coulihan says she never received the goods. "I have tried to contact the company numerous times by phone and e-mail," she told Consumer Reports WebWatch. "They have not returned any of my e-mails and their phone is always busy. I have never bought from an unknown company before and I regret my decision. It has disappointed many people."
The operators of 4-fans.com shouldn't have been hard to reach. Despite its homemade look, the site offered contact information that fraudulent sites often lack, including a contact e-mail address, an 800 number and even a physical address, in Edgewater Park, N.J.
But Coulihan wasn't the only 4-fans.com customer who says she got a perpetual busy signal. Sandra Juarez, a customer from San Francisco, says she ordered merchandise on Dec. 2, was charged over $40 and received a confirmation e-mail, but no goods either. In January, Juarez and two others posted such claims about 4-fans.com on RipoffReport.com, a popular site that publishes consumer complaints.
Consumer Reports WebWatch also received a constant busy signal and no replies to e-mail to 4-fans.com – which has since removed its 800 number from the site – and no answers to messages left at the home number of the site’s registered operators, Beth and Rob Maugeri. The 4-fans.com site has an "unsatisfactory" record with the New Jersey Better Business Bureau due to unanswered complaints.
The Buck Stops… Somewhere
While Coulihan and Juarez were steaming from their encounter with 4-fans.com, the Maugeris told RipoffReport.com in January that they were victims, too – of Online Data Corp., a company they contracted with in November to handle 4-fans.com’s Internet credit-card orders.
Beth Maugeri claimed Online Data Corp. held the funds it had charged 4-fans.com customers, and unpaid suppliers subsequently refused to ship the goods. In February, she elaborated in an interview with Philadelphia television station NBC10: "They [Online Data Corp.] called me and left a message saying we processed too much and they weren't going to release our funds at all."
Online Data Corp. responded to a Consumer Reports WebWatch question about these claims with a statement: "The merchant in question has experienced an extraordinarily high level of chargebacks [disputed sales] related to dissatisfied customers not receiving merchandise and products ordered from this merchant. Therefore [we] are taking appropriate and necessary actions to protect the consumers."
Whom to believe? Online Data Corp. itself has an "unsatisfactory" record with the Chicago Better Business Bureau due to unanswered complaints. Of 27 complaints in the last year, and 73 complaints in the last three years, the BBB says, Online Data Corp. resolved 56 and failed to respond to six.
Coulihan, for one, thinks 4-fans.com bears ultimate responsibility for delivering the goods for which its customers were charged. She received no communication about the problems the Maugeris were having as she continued to wait for her merchandise. And, she notes, instead of closing down after its bad fortune, 4-fans.com is still advertising on the Web and able to process credit-card orders.
"If they were worried about their customers, they would be proactive with the customers who placed an order and never heard from them again," Coulihan says. "They keep adding products to their Web site and changing the fonts and background colors."
If You Can't Trust Mom and Pop…
The 4-fans.com problems illustrate the risks to consumers as online marketing companies help untrained entrepreneurs launch e-commerce businesses and a complex chain of business relationships makes it unclear who's ultimately accountable when things go wrong.
The Better Business Bureau received more than 6,000 complaints related to sales by home businesses in 2002 and estimates these numbers grew last year.
"A high proportion of these are online businesses," says Jeanne Zielinski, the BBB’s director of bureau operations. "We find that a lot of work-at-home people are selling things online, and they generally are an agent for someone else."
In this case, the 800 number listed on 4-fans.com during the 2003 holiday season was actually a customer service line operated by SportsFanfare.com. This much larger sports merchandise site runs an affiliate program for mom-and-pop operations like the Maugeris'. While a SportsFanfare.com representative said he could not confirm whether 4-fans.com operated as one if its affiliates, Complaints.com, another publisher of consumer gripes, carried a December 2002 answer to a consumer complaint about a SportsFanfare.com order signed by "Beth Maugeri, CS Manager."
In cases like Online Data Corp., with its poorer BBB record, affiliates could put themselves financially at risk and – like the Maugeris – pass that risk on to their customers. To use Online Data Corp.'s Web marketing, hosting and e-commerce services, according it its Web site, would-be affiliates must agree to pay a $149 "setup fee," a $99 annual fee and at least $54.95 in other monthly fees, all before receiving commissions.
The problem, some consumer advocates say, is that online affiliate programs attract people who are new to business, often struggling economically, and uneducated about customer service standards and fulfillment. While the affiliate programs are supposed to help give people resources to deal with tough business situations, they rarely do – and online customers end up suffering.
"In these situations, it's very common for customers to pay for something they don't receive," says Matthew Smith, founder of Complaints.com. "It's often impossible to track down who you're buying stuff from, and the more small [sales] Web sites are out there, the more it's going to happen."
To avoid being stiffed by an unreliable e-commerce site, Smith recommends, consumers should do some research first – by checking consumer feedback sites such as Epinions.com, and by typing the Web site same into grassroots databases like the ones offered at Complaints.com, RipoffReport.com and PlanetFeedback.com.
"These are actual experiences, and you can pool the information and get a better idea of what you're dealing with," Smith says, noting that more than 80 percent of the complaints in these databases concern the delivery of the product – not the product itself.
"Where you buy from is more important than what you buy," Smith adds. "If you don't get it, you can't use it."
Sidebar: Online Deliveries: Your Rights
A special event like a birthday or anniversary arrived but the gift you bought online didn't. Now what?
All retailers, including e-commerce sites, by law must adhere to their shipping promises, or deliver an item within 30 days if a shipment date wasn't assured, says the U.S. Federal Trade Commission. If a Web site guaranteed delivery by Christmas, for example, but was unable to fulfill that promise, the company should have contacted you to get your consent to delay delivery and offered a revised shipment date. If you refused to approve the delay, or if the e-tailer couldn't promise another delivery time, you are entitled to a full refund -- no questions asked. The company cannot negotiate the amount of the refund or offer a partial refund plus credit toward future purchases.
If the company doesn't agree to give you a full refund, file a complaint with the FTC by phone, at 1-877-FTC-HELP (1-877-382-4357), or online at http://www.ftc.gov/.
These shipping rules apply year-round, not just during the holidays. And be sure to keep printouts of Web pages detailing your online order and the site's delivery promises.
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Robertson Barrett, a media consultant and writer, was a founder and managing editor of TIME.com and ABCNEWS.com. He was also vice president and general manager of The FeedRoom, a nationwide broadband news network in partnership with NBC and Tribune, and of Channel One Interactive, the educational television network's new media division.
He writes a biweekly column on scams and schemes online ans has written about spyware and Internet "washers" for Consumer Reports WebWatch.
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