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The ecommerce sector generated the largest number of complaints from consumers in South Africa during the 2021/2022 financial year.
That is according to the Consumer Goods and Services Ombudsman’s (CGSO’s) 2021/2022 Annual Report, presented to the public on Wednesday.
Based on the CGSO’s report, most of the complaints it received seem to relate to online shopping scams.
25% of the 18,747 complaints submitted to the CGSO between 1 March 2021 and 28 February 2021 were related to online transactions.
Although this was a slight decrease from the year before, during its 2019/20 year the ecommerce sector only accounted for 4% of complaints to the ombudsman.
The CGSO said the complaints showed that online shoppers buying clothes or electronics were most likely to be scammed.
However, the ombudsman said it does not have powers of enforcement or the right to issue binding decisions on goods and services suppliers.
That is the prerogative of the National Consumer Commission, which is a possible next stop for consumers dissatisfied with the outcome of the CGSO’s work.
The ombudsman’s primary form of recourse is to name and shame companies to inform consumers about potentially fraudulent websites.
During the 2021/2022 financial year, CGSO issued consumer alerts for four entities that accepted payments and then failed or refused to deliver the goods. They were:
MyBroadband and Carte Blanche collaborated on an investigation of Mr Shopper in 2021 and discovered the entity had made off with at least R340,000 in payments for products it never delivered.
Together, the four companies flagged by CGSO amassed a total of 535 complaints, with 399 being for the Ana Eleven Brand.
Interestingly, that company was still listed on credit provider Mobicred’s website at the time of publication, despite its own website being taken down.
The ombudsman said all these suppliers had one thing in common.
“They advertise goods — often at bargain prices — and then fail to deliver them, either on time or at all,” it stated.
“Where these suppliers do respond to customer queries — almost all stop responding at some point — the promised refunds fail to materialise.”
“On the rare occasions refunds were made, they were either not the full amount due to the buyer, or they took an unconscionably long time to reflect in the consumer’s bank account.”
The ombudsman said the suppliers had also contravened the Electronic Communication and Transactions Act.
“These suppliers also had dysfunctional communication channels, often closing down websites as soon as customers had paid or blocking them once payment had gone through.”
The CGSO said because it was unable to sanction the companies if they didn’t react to its queries, it was “all too easy” for the entities to reinvent themselves by opening new websites under another name.
“We continue to flag our inability to make a binding ruling as a policy issue that requires review by the Department of Trade, Industry and Competition (DTIC),” the ombudsman said.
Fortunately, suppliers that ignored the ombudsman were in the minority.
“Most ecommerce complaints in FY2021/22 related to goods and services that were not in working order or did not fit the description on the website, and delivery malfunctions.”
“A big thank you to all those participants who responded positively to resolve the complaints and refund consumers or replace products.”
The satellite and telecommunications services sector accounted for the second-highest number of complaints — at 17.5%.
That is an increase from the 13% recorded in 2020/2021, but still down significantly from the 26% of 2019/2020.
Appliance manufacturers and retailers were the only other two sectors with double-digit percentages of the complaints.
The table below shows the portions of complaints under each sector over the past three financial years.
eCommerce Headline Online shopping online shopping scams South African Consumer Goods and Services Ombudsman (CGSO)
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