16,000 Internet Retailers Flouting The Law. Research Findings from UK Internet Watchdog SafeBuy

Research conducted by Internet retailing watchdog SafeBuy has revealed that Internet retailing is something of a ‘Wild West’ with massive numbers of retailers flouting the law.

Announcing the research, Richard Jones, founder and CEO of SafeBuy and the UK’s leading expert on web retailing websites said, “a shocking one quarter (25 per cent) of the small and medium enterprises (SMEs) surveyed were found to be committing breaches of legal requirements for online trading.

“These included flouting the most basic requirements that every Internet retailer should be aware of and should comply with. For example, displaying a proper geographic address, a contact phone number and an email address. Plus having a legally-compliant goods returns policy.”

SafeBuy was set up in 2003 following the closure of the ‘Which? Web Trader Scheme’. It provides consumer confidence by producing and policing a comprehensive Code of Best Practice for the UK’s Internet retailing sector. SafeBuy assesses websites for compliance with this code of practice and with relevant UK and EU trading laws. Websites which pass the accreditation are able to display the SafeBuy Consumer Care confidence mark on their website.

SafeBuy also operates a comprehensive web retailer star rating scheme (accessed via the SafeBuy Stars logo on appropriate sites) which is moderated and cannot be influenced or ‘fixed’ by the retailers and thus gives a highly accurate consumer rating of that retailer.

To back up the Code of Practice, the organisation operates a Mediation Service, which has brought satisfactory outcomes to almost 2,500 consumers who had complaints against internet retailers. This service is completely free to consumers in relation to SafeBuy-accredited retailers.

Said SafeBuy CEO Richard Jones, “All of SafeBuy’s services are designed to give consumers confidence and safety in their online shopping. Whenever they see the SafeBuy logo displayed by an online retailer they can be confident that it is a good, law abiding, retailer to do business with.”

The research reviewed 225 random SME websites that are not accredited by SafeBuy. The research found that:
• Seven per cent did not advise the customer before paying that they have a legal “right of return” if they change their mind after ordering.
• Six per cent did not provide a geographic address where they conduct their business from. This is a legal requirement.
• An astounding twenty per cent did not publish a contact e-mail address. The frequently used ‘contact us form’ is not an alternative. On this matter the law is unequivocal, stating: ‘… the details of the service provider, including his electronic mail address, which makes it possible to contact him rapidly… must be displayed’.

Commenting on the findings, Jones said, “there are an estimated 65,000 UK online retailing sites that are not yet accredited by SafeBuy. Extrapolating the research findings could mean some 16,250 of those websites are not complying with the law.

“One highly unacceptable finding of the research”, he continued, “was the number of websites which attempt to prevent consumers from being aware of their legal rights. A significant number of websites went to shocking lengths to prevent consumers exercising their legal right of return. We found many examples like these:
‘We will use our discretion in deciding whether to accept a return.’
‘If you open the packaging you can’t return the products.’
“If you’ve tested the product… you’ll have to pay us a fee.’
But the research team’s absolute favourite was:
‘Returns must be in perfect condition.’
which to our minds at SafeBuy tries to rule out sending back any faulty or damaged-in-transit goods. These statements are all most clearly illegal!”

Does your website break the law? A checklist
SafeBuy’s mission is to make a web shopping as safe as possible for consumers – so here is a 10-point checklist for web retailers and consumers:
1. Does the website display the consumer’s rights to return unwanted goods. And is there a clear ‘How To Return’ section?
2. Does the website clearly display a geographic address, contact email and phone number – not just a ‘contact us’ form?
3. Is the method and cost of delivery clearly indicated before the order is placed?
4. Is the security level for each online payment option clearly shown?
5. Does the website tell the consumer how to lodge a complaint and what the complaint procedure is?
6. Does the website clearly show the contract terms – including guarantees and warranties? And does it clearly state that these do not affect the consumer’s statutory rights?
7. Does the site clearly state that all the consumer’s data will be kept private in accordance with the Data Protection Act 1998 and the EC Communications Directive 2003?
8. Does the website state that the retailer adheres to the terms of the UK Sale of Goods Act and the EU Distance Selling Regulations?
9. Are phone numbers on the website for queries relating to an order charged at no more than the normal UK inland rate? If technical support lines are charged at a premium rate is this clearly stated?
10. Does the site display the SafeBuy accreditation logo to give consumers absolute confidence that all of these factors and many more have been independently verified?

Web retailers and consumers can read the SafeBuy code of practice (from which these 10 points are taken) for Internet retailing at safebuy.org.uk

How traders can ensure compliance
Web retailers who wants to be sure they comply with law and the code of practice for internet retailing should contact SafeBuy and go through the accreditation process which, once they are fully compliant, will permit them to display the SafeBuy consumer confidence logo on their website. For details go to safebuy.org.uk

People Power needed
In conclusion, SafeBuy’s Jones said, “This situation with potentially over 16,000 internet retailers contravening the law is frankly outrageous. We knew that there were ‘dodgy traders’ out there but this number of online retailers breaking the law is patently unacceptable. What we now need is ‘People Power’ based on consumers educating themselves on their rights and taking retailers to task.

“To help everybody we’ve published a free quick 5-point checklist for consumers at http://care.safebuy.org.uk/ and a much more comprehensive free 8-point checklist for retailers with loads more information to help them in both legal and marketing terms also at safebuy.org.uk

“If a web retailer is not a subscriber to the SafeBuy accreditation scheme consumers should challenge them as to why they are not. And if you have a problem with them go straight to your Citizens Advice Bureau or use the cheap and easy Small Claims Court process to get satisfaction.”

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Additional background:

• SafeBuy is not a trade association – it is an independent standards body.
• Started in 2003 after Which? closed its WebTrader scheme.
• Initiated work with the OFT in 2006 under the Enterprise Act of Parliament to define a general Code of Practice for web retailers.
• OFT-agreed text for Code-of-Conduct first released in 2007.
• Focused entirely on SMEs – big names (Tesco, M&S) will trade on their own reputation.
• Mediated on almost 2,500 consumer complaints against Code-approved retailers over seven years – out of 28 million transactions; 98% success rate with over 500 emails of consumer thanks.
• SafeBuy ‘Stars’ released in 2012 as the most comprehensive consumer review system in the UK on web retailers.
• The founder and CEO, Richard Jones, appointed ‘UK Leading Expert’ in 2011 by BSI to work with ISO on the world standard (ISO10008) for web retailing.
• It is a matter of record that web retailing in the UK leads the world and SafeBuy leads the UK in defining the standards for, and measuring the performance of, web retailers.

SafeBuy – www.safebuy.org.uk – operates as an independent organisation with its only funding coming from subscribers to its Code of Practice who are retailing on the web. The founder, Richard Jones, came from a background as editor of The Good Software Guide from 1987 to 2002. The Guide’s defining principle was to review PC software with no payments or commissions or advertising from any software makers. Its revenue came from subscribers – mostly corporates and the public sector – including online to all higher education in the UK via the Joint Academic Network.

Whilst editing the Guide, Richard Jones also was a freelance columnist for the Daily Telegraph on software and in 1999 was lead writer and editor for the Sunday Times on the 800-page Millennium Bug Report with a foreword by the Prime Minister, Tony Blair,

Following this principle of completely unbiased reviews and with a passion for informing users of the truth about hundreds of software products it became apparent in 2001 that with the closure of the Which? Webtrader scheme there was no independent research house in the UK setting standards and evaluating web retailers. Hence SafeBuy was born in 2003.

It should be noted that SafeBuy is not a trade association and does not represent its subscribers to anybody. It is an impartial operation setting web retailing standards, recognising effective operations and mediating on disputed issues between consumers and retailers.

In 2010 Richard Jones was appointed by the British Standards Institute to be ‘UK Leading Expert’ representing the BSI on the International Standards Organisation’s working group developing ISO 10008 – the world standard for ecommerce websites, released in 2013.

SafeBuy has three core elements – 1) a comprehensive Code of Practice; 2) a Star Rating scheme for web retailers; and 3) a no-charge mediation operation for dissatisfied consumers.

The Code of Practice
With support from the Department of Trade and Industry in 2003 the SafeBuy Code of Practice was developed, the text of which subsequently became agreed with the Office of Fair Trading (OFT) in 2006 under stage one of the Consumer Codes Approval Scheme (CCAS) authorised by Act of Parliament. See http://care.safebuy.org.uk/code-of-practice/

The CCAS was designed to make buying and selling better for everyone. It helped consumers choose businesses that promised to provide a higher standard of customer service than required by law, including better protection in the event that something goes wrong.

In 2014 SafeBuy has the only comprehensive Code of Practice for the web retailing industry in the UK and remains the only organisation which has worked with the OFT to develop an appropriate Code. Retailers who have committed to conform to the Code are entitled to display the SafeBuy logo on their website.

As a matter of record, since 2003 SafeBuy has removed over 130 subscribers from SafeBuy membership for breaches of the Code.

The Star Rating Scheme
Consumer review schemes have become notorious for being open to distortion and dishonesty including – maybe even especially – in the web retailing industry.

Accordingly SafeBuy has determined five key characteristics for consumer reviews of retailers for its Star Rating operation.

1. The request for a review must go to all consumers who have recently purchased from the retailer. This is achieved by a copy of the order acknowledgement, which is required by law to be sent to the consumer within 24 hours of ordering, being sent to the SafeBuy secure research centre. SafeBuy itself then sends an invitation to review to every customer who has placed an order.

The retailer cannot ‘cherry pick’ the consumers to whom the review opportunity is sent. SafeBuy has additional controls to avoid fake order acknowledgements.

2. All consumer responses are published online as soon as received by SafeBuy with no intervention possible by the retailer. It is known that some supposedly independent review systems allow the retailer to intervene with what becomes published. SafeBuy and the OFT agreed that this open publication requirement was essential.

3. There is no opportunity for the retailer to respond to the consumer’s review in the public arena. There has been a rather insidious idea that the retailer resolving any complaints sometime later makes everything OK. This circumstance perpetuates two fallacies. Firstly, any adverse consumer review already follows a situation which the retailer patently hasn’t resolved until it became public and this fact should be made clear. Secondly, although the retailer is given a public right of reply the consumer is not given any right of comeback again. Hardly a balanced operation and seems to be designed to perpetuate the fallacy that it makes everyone happy when in fact the consumer may have been ‘bought off’..

4. It is wishful thinking that individual consumers can give accurate star ratings. No consumer has the knowledge of what the overall parameters are and what is or isn’t important – except to them. And what one consumer may rate as 4, another may rate as 2. Assembling or averaging these ratings does not make them any more accurate. So the SafeBuy Stars system drills down into individual areas so that any potential customer can see what is good, indifferent or even bad about the retailer in 10 different areas of the business. All the feedback, including the last 20 responses for the retailer, is openly published.

5. As noted, the SafeBuy Star ratings are not subjectively determined by individual consumers. Consumers individually have different priorities. For one it’s speed of delivery. For another it’s telephone support in times of difficulty. So the SafeBuy Star ratings are determined by an algorithm known only to SafeBuy which is based on feedback from almost 2,500 mediations conducted since 2006 and constantly updated. Where overall problems with delivery timescales are most prominent the weighting is high. Where overall problems with support are most significant … and so on. Only SafeBuy is believed to hold comprehensive UK online retail mediation data in this manner.

See http://care.safebuy.org.uk/what-is-safebuy/ and scroll down for more Star Ratings data with further links to a sample successful retailer. Retailers who have a SafeBuy Stars rating of over three stars are entitled to display the SafeBuy Stars logo on their website. Those with consistently under three stars are removed from SafeBuy membership.

Mediations
Since 2006 SafeBuy has conducted almost 2,500 mediations between consumers and retailers. All documentation from either party or the SafeBuy mediator is copied to both parties.

In fact all mediations have proved successful except where, in under 2% of cases, the retailer is no longer trading. It is not possible to check on every SafeBuy subscriber every day but it is a certainty that SafeBuy would know of a problem earlier than almost anybody else because of mediation requests.

In the event of a retailer ceasing to trade SafeBuy advises the consumer of their rights with both credit and debit cards to ensure that they are correctly recompensed. It has been noted over time that staff at the issuing banks sometimes seem not to know either the law or their own rules in the matter, so clear instructions are given to the consumer up to and including involvement with the banking Ombudsman and the Small Claims Court.

SafeBuy holds hundreds of emails of thanks on file from consumers who have used the mediation services. It also notes retailers’ overall experience of SafeBuy accreditation and membership at http://care.safebuy.org.uk/reviews/

In each of the three elements shown above SafeBuy is uniquely positioned as an independent leader in its field. Feedback from SafeBuy has been fed into the ISO 10008 world standard for web retailing. It is a matter of record that web retailing in the UK leads the world and SafeBuy leads the UK and the world in defining the standards for, and measuring the performance of web retailers.
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