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CURRENT ISSUES
Topics of Interest to Consumers
Cave@internet/emptor
Buying on the
internet can be even more dangerous to your wallet than buying
in person. Two recent cases at the Consumer Assistance Council
illustrate some of the problems.
In one case, a
man bid on a new computer (Pentium III 450 MHz system with a
17" monitor, 96 MB Ram, 4.3 gig hard drive, 56K modem,
40x CD-Rom, Sound Blaster card, 100watt speaker system,
Windows 98, other "goodies" and 1 month FREE
internet access) system on a popular internet auction site and
his bid was accepted. He contacted the seller who promised to
build the system to order in 3 days as soon as he received a
cashier's check for $650. The consumer sent a check and was so
pleased with the price and expected service that he ordered
another computer for his mother and sent another cashier's
check.
Then the
problems started. Pages and pages of email correspondence
detail many promises not kept. Finally, after a month, one
computer arrived at the consumer's door. It was a "used
15 monitor, a Pentium II 350mhz with 32 meg Ram, 2 meg hard
drive, integrated sound and video, several internal components
were held in place with one screw. The CD door was broken and
there was no packing material to protect the system." The
consumer didn't dare to turn on the computer (there were no
power cords anyway.) The seller suggested that the buyer file
a concealed damage claim with the freight company. Finally the
buyer sent it back after getting a promise of a refund. To
date there has been no response.
The second case
is even more difficult because the transaction took place
outside the internet auction system. The consumer's bid on a
porcelain figurine was below the reserve price, but the seller
soon contacted the consumer privately (apparently trying to
avoid paying the auction site commission) and they agreed on a
price between the high bid and the reserve price. The consumer
felt that this was still a very good price.
Again, the
consumer sent a check. The figurine arrived and it had several
chips and a repaired crack, which severely impaired its value.
The consumer and vendor talked and they agreed to swap
figurine and check. The consumer sent the figurine, but the
seller never sent a check. The seller asserts that the
figurine returned was not the same figurine they sent!
Again, the
seller is out of state, cash was used and, in this case, there
is no help from the auction company since the transaction
occurred outside of their web site.
Here are some
ways you can protect yourself when buying on-line.
· Guard your
personal information. Don't provide information that you're
uncomfortable giving. Don't provide financial account
informational unless you are paying for a purchase using that
account.
· Know the
business you are dealing with. Auction sites provide some
ratings of the sellers who use their sites. Find out where the
business is physically located. Understand the refund and
return policies.
· Consider
taxes and shipping costs. There may be taxes due on your
purchase and you will be expected to pay shipping fees. You
may also have to pay for shipping if you want to return the
item.
· Ask about
insurance. Will the seller pay to insure the shipment, or is
it your expense? How much does it cost? Is other insurance
available to protect you if you don't get what you paid for or
are dissatisfied? One is to deal with known vendors who have
stores in Massachusetts. Web auction companies have insurance
programs under which the consumer may be able to collect $200,
but that is only a small part of the $1,300 the computer buyer
has spent.
· Pay the
safest way. Use a charge card, not cash. Local vendors can be
taken to small claims court, but it is very hard to do that
successfully with out of state vendors who have no local
offices. Had a charge card been used in the above cases, the
consumer would have rights under federal laws and might be
able to get their money back through the credit card company,
but these consumers sent cash.
· Use an
escrow service. If you are dealing with a small vendor or
individual, as you would through auction sites like eBay,
Inc., you could insist on using an escrow service. You send a
check or charge card to a third party, an escrow agent, who
tells the vendor to send the item to you. When you get the
item, and are satisfied, you notify the escrow agent and they
send the payment to the seller. If the item is not
satisfactory, you return it and the vendor tells the escrow
agent to release the money back to you.
The charge for
this service at eBay, Inc. is as little as $2.50 and is never
more than 4% of the item's price. Well worth it! If the vendor
will not use an escrow service, we suggest you do not do
business with them unless they trust you to pay AFTER you have
received and inspected the item.
· Keep
records. Print out all information on your transaction,
including the product description, delivery information,
privacy policy, warranties and any confirmation notices that
the seller sends you.
· Report
problems. Report problems to law enforcement officials:
Federal Trade Commission
National Consumers League
Consumer Assistance Council
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