Disreputable online retailers that breach consumer laws on refunds and returns are paying Google for top shopping listing slots ahead of Black Friday, an investigation has revealed.
These retailers, which cumulatively attract well over a million visits a month, are subjecting customers to a range of unfair terms and conditions and unreasonable charges, according to consumer watchdog Which?
Among the most serious breaches were firms charging ‘restocking fees’ of up to £300 for customers who want to return a purchase.
These retailers demand goods are returned in ‘brand new’ condition and insisting on customers bearing the cost of posting faulty items back to Hong Kong.
With Black Friday just days away, the research is a warning to consumers tempted by bargain deals at the top of Google’s search rankings.
The findings also raise questions about the scrutiny of paid-for listings on Google Shopping – which generate millions of pounds in profits for the search giant.
‘Our research shows how dodgy retailers can exploit a lack of oversight of ads on Google’s shopping platform – putting consumers at risk of being ripped off,’ said Adam French, Consumer Rights Expert at Which?
‘It seems wrong that firms that breach consumer laws can pay Google to secure prominent slots at the top of shopping search results.
‘This is a significant gap in consumer enforcement, which reinforces why the next government must carry out a major overhaul of the system to reflect how people buy goods and services today.’
eGlobalCentral UK, TobyDeals and Techinthebasket were among the electronics retailers looked at in the Which? investigation.
These websites are among the top search results on Google Shopping for popular gadgets such as the Samsung Galaxy Note 10, Apple iPhone 11 and Apple AirPods.
The companies are based in various countries – but all are subject to certain UK consumer laws because factors such as sterling pricing and UK website domain names mean they are classed as marketing directly to British consumers.
However, when Which? analysed the small print of the sites, it found a number of breaches of the Consumer Contracts Regulations and Consumer Rights Act involving returns rights and faulty goods.
eGlobalCentral UK – which is based in Hong Kong but gets almost 90 per cent of its web traffic from the UK – states customers will be charged £15 if an order is cancelled after it has been processed and reserves the right to charge a restocking fee of £30-£300 if the terms of its returns policy are not met.
eGlobalCentral UK states customers will be charged £15 if an order is cancelled after it has been processed and reserves the right to charge a restocking fee of £30-£300 if the terms of its returns policy are not met
TobyDeals – also based in Hong Kong – said customers could face a £20 administration fee if they cancel after an order has been processed and warned of a £50 restocking fee for any missing accessories.
eGlobalCentral UK says it will only accept returns of goods “in brand new condition” and in the original packaging.
But Which? points out that any customer would find it difficult to return their purchase in any event as the terms and conditions make clear that the only address provided ‘does not accept any return of goods’.
TobyDeals customers came up against the same obstacle.
TobyDealssaid customers could face a £20 administration fee if they cancel after an order has been processed and warned of a £50 restocking fee for any missing accessories
Both eGlobalCentral UK and TobyDeals said faulty goods must be returned within 14 days – less than half the period permitted by law – while TobyDeals also specified that the customer must bear the expense of shipping the item back to Hong Kong.
According to the Consumer Contracts Regulations customers have the right to cancel an order placed online at any time free of charge.
Customers have at least 14 days after the product has been received to request a full refund and a further 14 days for the return to be received.
Less serious breaches of the rules were found in the terms and conditions of UK-based Techinthebasket and Wowcamera.
UK-based Techinthebasket’s terms and conditions were also found to be in breach of Consumer Contracts Regulations, according to Which?
Wowcamera updated its returns policy to bring it into line with the regulations after Which? shared its findings, while TobyDeals also amended its online terms and conditions.
Which? said it will be monitoring whether the changes to the online Ts&Cs are reflected in the customer service experience of these companies.
The two other retailers, eGlobalUk and Techinthebasket, have not responded to a request for comment.
In the last three months of 2018, Google raked in $32.6 billion from advertising revenues across its various platforms, including Google Shopping.
Google Shopping generates revenue using a cost-per-click (CPC) model, so retailers only pay when a customer clicks through to their website.
Retailers can bid on how much they are willing to pay per click, but higher bids usually secure the top search results.
While the CPC model is common among online marketplaces, Which?’s research suggests it allows dodgy retailers to buy a coveted slot at the top of search results, where their listings are likely to attract unsuspecting customers.
Google said it uses a combination of algorithmic and human review to check retailers using its Shopping Ads.
Security experts from Proofpoint found that only 15 per cent of the top 20 Europe wide online retailers are actively blocking fraud emails from reaching customers (stock image)
It said it had disapproved and removed the retailers’ Shopping Ads in the UK.
‘Because we want the Shopping Ads you see on Google to be useful, relevant, and safe, we have robust policies describing what we do and don’t allow on our ads platform,’ a Google spokesperson said
‘In addition, we require the merchants who use our platforms to adhere to local law. As such, we have disapproved and removed their Shopping Ads in the UK.’
Last month Which? revealed how consumers were at risk of being scammed by high-risk unregulated financial investment products marketed online – including through paid ads on Google.
Which? is passing its findings to the Competition and Markets Authority, the regulator which is currently carrying out a wide-ranging investigation into digital advertising.
The consumer watchdog’s advice to shoppers looking for bargains this Black Friday is to be wary of offers from little-known brands and check your consumer rights so you have the upper hand if a seller tries to fob you off.
HOW DO YOU STAY SAFE WHEN SHOPPING ONLINE?
sPolice in North Yorkshire have issued a fraud warning, urging people to be careful on the run up to Black Friday and Christmas (stock image)
Security experts from Proofpoint say there are several steps shoppers can take to keep themselves safe when shopping online.
1. Use strong passwords: Do not reuse the same password twice. Consider using a password manager to make your online experience seamless, whilst staying safe. Use multi-factor authentication for an added layer of security.
2. Avoid Unprotected WiFi: Free/open-access WiFi is not secure: cybercriminals can intercept data transferred over unprotected WiFi, including credit card numbers, passwords, account information, and more.
3. Watch out for ‘lookalike’ sites: Attackers create ‘lookalike’ sites imitating familiar brands. These fraudulent sites may sell counterfeit (or non-existent) goods, be infected with malware, or steal money or credentials.
4. Dodge Potential Phishing and Smishing Attacks: Phishing emails lead to unsafe websites that gather personal data, like credentials and credit card data. Watch out for SMS phishing too —aka ‘smishing’ — or messages through social media.
5. Don’t click on links: Go directly to the source of the advertised deal by typing a known website address directly into your browser. For special offer codes, enter them at the checkout to see if they are legitimate.
6. Verify Before You Buy: Fraudulent ads, websites, and mobile apps can be hard to spot. When downloading a new app or visiting an unfamiliar site, take time to read online reviews and any customer complaints.
Source: Proofpoint