CONSUMER ALERT

MIKE COX
 ATTORNEY GENERAL

The Attorney General provides Consumer Alerts to inform the public of unfair, misleading or deceptive business practices, and to provide information and guidance on other issues of concern.

CYBER SHOPPING
HAZARDS AND SAFETY TIPS

A growing number of people are avoiding crowds while attempting to save both time and money by turning to the internet for gift and personal purchases. A recent study released by the nonprofit association Consumer Federation of America ("CFA") entitled "Cyber Hazards for Internet Shoppers" highlights the following significant cyber shopping hazards:

• Search engines that lead you to paid advertisers rather than the best prices;
  
  
• Unreasonable shipping and handling charges not disclosed during the search that dramatically change the real cost of a product;
  
  
• Sites that offer different prices for the same item depending on how you enter the site.
  
  
• Searches that lead to unwitting disclosure of personal information;
  
  
• Brands with policies barring sales on the internet thus limiting product selection.
  
  

CFA's study found that it is common practice to sell "keywords" and preferred placements on many search engines. Thus the engines do not provide an objective search return, but rather one manipulated by those able to purchase preferred placement on lists. Another unfortunate finding of the study is the extent of undisclosed or hard to find and potentially unreasonable shipping and handling charges.

Perhaps the most surprising finding of the study was that reaching the same site through different methods could result in different prices for the same product -- as much as a $100 difference on a $400 - $500 item.

The study also suggests that internet shoppers need to be very wary of shopping clubs. Member prices may seem fairly low and a "free trial period" may be offered, but after filling out a form revealing your name, address, telephone number, and e-mail address, the shopper discovers that the membership costs can be considerably more and may be automatically billed to your credit card at the end of the trial period. At this point, even if you decide not to go through with the membership, the personal information is already in the hands of the shopping club and cannot be retracted.

In order to take full advantage of the internet as a powerful shopping tool, CFA has developed the following safe internet shopping tips:

• Be aware that many websites sell keyword search returns and some search returns are simply paid advertisements, not the lowest or best prices.
  
  
• Always use 3 or more website search engines and explore both the search bar and shopping link when searching for product prices. Visit local stores and check out printed catalogs and ads for street prices so you can gauge whether the better deal is on the internet or from a more traditional source.
  
  
• Carefully check and compare shipping and handling charges before ordering. They can easily add 10-15% to the cost of the product and dramatically change the results of your "best price" search.
  
  
• Be careful because the cost of obtaining information may be disclosing personal data. Many sites casually solicit personal information without fully disclosing their policies and intentions. Personal information may find its way to direct marketing companies, including telemarketers.
  
  
• Remember that no single search engine can guarantee the best price. Carefully evaluate the search engines and look for advertising-free shopping sites, such as the nonprofit www.bargains.org.
  
  

While you visit local stores to check out printed catalogs and ads for street prices, you should also physically inspect the product to make sure it is precisely what you want. At this time you may also wish to additionally review the enclosures and the fine print that contain the terms of a purchase agreement or warranty. As a general rule, even just accepting the goods or services means that you have agreed to all of the terms and conditions of the purchase agreement. One such condition often buried in the fine print is a dispute resolution or arbitration agreement clause. These clauses often contain conditions unfavorable to the consumer (for more information refer to the Consumer Alert entitled "Mandatory Arbitration Clauses").

Finally, you may also wish to refer to a previous consumer alert entitled "Shopping On-Line" for some basic information to assist you in becoming a cyber smart shopper.