Group buying gripes soar but refunds still consumers’ top complaint

Refunds continue to be the main cause of consumer complaints across all product categories, according to figures from NSW Fair Trading, as group buying and discount deals gripes escalate.

The figures, released by Fair Trading Minister Anthony Roberts, reveal the top 10 consumer complaints to Fair Trading in 2011/12:

1. Household electrical, white goods and gas appliances
2. Group buying and discount vouchers and coupons
3. Used car or motorcycle
4. Furniture, furnishings and manchester retail
5. Construction – house construction
6. Clothing, footwear, accessories and jewellery retail
7. Travel and tourism
8. Automotive services – motorcar repairs and maintenance
9. Construction renewable energy – solar PV panels
10. New car or motorcycle

According to Roberts, more than 44,000 complaints were made to Fair Trading during 2011/12.

Of these, more than 5,000 were about refunds – the most common consumer grievance across all product categories – suggesting start-ups need to revisit their refund policies.

Roberts expressed particular concern about the number of complaints relating to group buying and discount deals.

The report for the 2011/12 financial year shows more than 2,200 complaints were received, putting the industry at number two after a swift spike.

In January this year, Roberts said group buying websites had “come out of nowhere” in late 2011, just missing the top ten list of complaints for the 2011 calendar year.

At the time, he issued a warning to consumers that group buying and discount deals gripes were escalating.

In light of the latest figures, Roberts wants more group buying and daily deals businesses to sign up to an industry code, and is calling for ongoing compliance work by consumer regulators.

In November last year, the Australian Direct Marketing Association released a voluntary code of practice for the industry.

Then earlier this year, it introduced a guide for businesses on supplying a group buying website.

Meanwhile, Roberts announced a national project on group buying and daily deals businesses, with compliance programs, research and public education.

“Twelve months ago, some group buying businesses saw themselves as brokers between retailers and consumers,” Roberts said in a statement.

“Under the Australian Consumer Law, consumers have the same rights regarding refunds and returns as with traditional bricks-and-mortar retailers.”

The news comes on the back of the 2012 Telecommunications Industry Ombudsman (TIO) annual report, which shows the number of new telco complaints made in 2011/12 decreased by 2% on the previous year.

However, complaints about mobile phone increased by 9% in 2010-11, reflecting the rising use of smartphones.

Poor coverage, billing disputes and the quality of information given to consumers at the point of sale were common issues in these complaints.

This article first appeared on StartupSmart.