Third of online shops undermine consumer rights, says OFT

The OFT analysed over 500 UK shopping websites to see if they complied with consumer protection laws by, for example, including physical addresses on sites, telling shoppers of their rights and being transparent about pricing.

It found that nearly a third of sites failed in one key regard. It said that 31% of sites appeared not to refund the full cost of returned goods, an integral part of European laws about distance selling.

It also found that 40% of sites were not fully transparent about their pricing, not telling customers that compulsory additional charges would be added to an item until the checkout stage of a purchase.

The OFT estimates that shoppers pay up to £100 million a year in unexpected charges.

The sweep was undertaken as a follow-up to an OFT report last summer on internet shopping. That survey found that the majority of internet shoppers were not aware of their rights under the Distance Selling Regulations.

The OFT said that in its sweep, conducted in December 2007, most sites were operating in line with the law. "The results suggest that most large UK-based online retailers are complying with key consumer protection requirements," said an OFT statement. "However, [the survey] also identified room for improvement in some areas, including the provision of adequate contact details, and transparency in cancellation and refund rights."

The research found that 14% of sites did not provide a physical address, 15% did not tell customers that they could cancel an order seven working days after receiving goods, while 31% "appeared not to comply with the requirement to refund the full cost of the goods," the OFT said.

"We will be sending the report to the businesses reviewed," said OFT director Heather Clayton. "We encourage all online retailers to check their sites to ensure that they comply with regulations so that shoppers can be confident that their rights are respected when they shop online."

Consumers are protected when they shop online by the Distance Selling Regulations and the E-Commerce Regulations. These laws provide cancellation rights, force sellers to make their identity, contact details and physical addresses clear and ensure that consumers are provided with information about their rights before a contract is concluded.

The OFT said last year that the UK online shopping market is worth £21.4 billion a year and that 20 million people shopped online in 2006, a third of them spending over £1,000.