jokach
December 23rd, 2004, 10:03 PM
posted from:
http://www.contractoruk.com/news/001873.html
The Office of Fair Trading is investigating 25 websites which promise a range of electronic ‘free gifts,’ as a way to get more shoppers hooked.
It said as part of a clampdown on fraud it would examine sites claiming to send items including an iPod, a palm pilot or a mobile phone, alongside a purchase of only £20.
John Vickers, OFT chairman, said: “The problem is that these schemes require many more people to join than will ever receive their ‘free gift.’
“The schemes will ultimately collapse and the vast majority of people who have joined will lose out. We are warning people not to be misled into buying by the remote prospect of a ‘free gift’.”
It is understood that shoppers opting for a free gadget are added to a waiting list of online punters - all of whom have already selected a similar gift.
Once a shopper makes it to the top of the queue, they receive their gift after a prescribed number of new recruits has signed on.
Such sites tend to encourage users to ‘tell a friend’ about the shopping service, but little are customers aware just how crucial this is – if they are to ever receive their gadget.
The OFT said this practice has led to some members posting adverts on auction sites, with the header of ‘opportunity to buy a mobile for £20.’
According to the Financial Times, the engine for these ‘rogue’ websites works in a similar way to financial pyramid models where the only way to get money, is to make other investors join.
One cited example shows the unfortunate instance of signing up in 100th place on a waiting list that requires 50 new recruits per gift, meaning the present would only be dispatched when 5,000 people had joined.
Consumer group, Which?, said they were glad the OFT was targeting rogue traders but said a certain level of responsibility was down to the shopper.
“Our advice to people that are shopping online is that if it looks to good to be true, then it probably is.”
The warning comes as evidence from Retail Decisions, shows the UK is to double its online Christmas spend on last year’s figure – with levels now only marginally behind the US.
Despite soaring levels of fraud, the sales boom for both countries during December was explained by the wider uptake of high-speed internet services.
Dec 20, 2004
http://www.contractoruk.com/news/001873.html
The Office of Fair Trading is investigating 25 websites which promise a range of electronic ‘free gifts,’ as a way to get more shoppers hooked.
It said as part of a clampdown on fraud it would examine sites claiming to send items including an iPod, a palm pilot or a mobile phone, alongside a purchase of only £20.
John Vickers, OFT chairman, said: “The problem is that these schemes require many more people to join than will ever receive their ‘free gift.’
“The schemes will ultimately collapse and the vast majority of people who have joined will lose out. We are warning people not to be misled into buying by the remote prospect of a ‘free gift’.”
It is understood that shoppers opting for a free gadget are added to a waiting list of online punters - all of whom have already selected a similar gift.
Once a shopper makes it to the top of the queue, they receive their gift after a prescribed number of new recruits has signed on.
Such sites tend to encourage users to ‘tell a friend’ about the shopping service, but little are customers aware just how crucial this is – if they are to ever receive their gadget.
The OFT said this practice has led to some members posting adverts on auction sites, with the header of ‘opportunity to buy a mobile for £20.’
According to the Financial Times, the engine for these ‘rogue’ websites works in a similar way to financial pyramid models where the only way to get money, is to make other investors join.
One cited example shows the unfortunate instance of signing up in 100th place on a waiting list that requires 50 new recruits per gift, meaning the present would only be dispatched when 5,000 people had joined.
Consumer group, Which?, said they were glad the OFT was targeting rogue traders but said a certain level of responsibility was down to the shopper.
“Our advice to people that are shopping online is that if it looks to good to be true, then it probably is.”
The warning comes as evidence from Retail Decisions, shows the UK is to double its online Christmas spend on last year’s figure – with levels now only marginally behind the US.
Despite soaring levels of fraud, the sales boom for both countries during December was explained by the wider uptake of high-speed internet services.
Dec 20, 2004