StreetDeal's hidden 'membership fee' riles online shopper

Mr Smith Leong was told by StreetDeal that the extra charge of $88 was a premium membership fee. Case has received 49 complaints against the firm since January 2014, more than double the 24 in 2012 and 2013. Most of the cases were about hidden member
Mr Smith Leong was told by StreetDeal that the extra charge of $88 was a premium membership fee. Case has received 49 complaints against the firm since January 2014, more than double the 24 in 2012 and 2013. Most of the cases were about hidden membership charges.ST PHOTOS: MATTHIAS HO FOR THE STRAITS TIMES, FILE

Customer charged additional $88 for set of drumsticks on sale for $16.40

A few days after avid online shopper Smith Leong bought a set of drumsticks - priced at $16.40 - from e-commerce site StreetDeal, he was shocked to see a separate $88 charge on his credit card bill.

"I thought I might have accidentally bought something else so I quickly logged on to my StreetDeal account, and checked all my invoices and e-mail. Nothing in the history showed that I had made any other purchase," said the self-employed 31-year-old, who bought the drumsticks last month.

When he contacted the homegrown firm, he was told the extra charge was a premium membership fee, and that it had been outlined clearly during the purchasing process and in the terms and conditions.

"I felt cheated," said Mr Leong, adding that he was refunded the $88 in credit for future purchases after numerous angry e-mail messages back and forth with the firm. "But I would rather just have my money back."

The Consumers Association of Singapore (Case) has received 49 complaints against StreetDeal since January last year, more than double the 24 in 2012 and 2013.

NEED FOR CLARITY

We feel that it is unfair for StreetDeal to charge consumers for premium membership fees if the consumers did not explicitly state that they want to sign up for this membership...

MR SEAH SENG CHOON, executive director of Case

FREE TRIAL

If they want to cancel before the free trial, they can do so. And once we charge customers two days later, we send them another e-mail to tell them about the charge.

MR GREGORY COSTAMAGNA, StreetDeal's chief executive, adding that customers will get a refund in credit if they want one

Most of the cases are about hidden membership fees - either a one-time charge or in instalments.

Case is investigating the matter. It said the firm could be flouting the Consumer Protection (Fair Trading) Act (CPFTA). Under this Act, it is an unfair practice to use small print to conceal a material fact from a consumer, said Case executive director Seah Seng Choon.

"We feel that it is unfair for StreetDeal to charge consumers for premium membership fees if the consumers did not explicitly state that they want to sign up for this membership, and this could be a misleading claim under the CPFTA," he said.

When contacted, Mr Gregory Costamagna, StreetDeal's chief executive, said the company has received some complaints from customers who claimed it was unclear that they were signing up for a membership. However, they made up only 1 to 2 per cent of its premium members here, he said.

At the checkout page, shoppers need to agree to be charged the membership fee, said Mr Costamagna. When they make payment, they are shown only the amount for the items purchased. The membership fee is excluded because shoppers are given a two-day free premium membership trial before they are charged, he said.

"If they want to cancel before the free trial, they can do so. And once we charge customers two days later, we send them another e-mail to tell them about the charge," said Mr Costamagna, adding that customers will get a refund in credit if they want one.

Launched in 2010, StreetDeal has as many as 10,000 premium members in Singapore. Premium members return to the site to shop three times more than regular members, said Mr Costamagna.

StreetDeal also operates in countries such as Malaysia, Thailand, the Philippines and Australia.

But Mr Leong thinks that there is a need for more clarity.

"Yes, I did miss the part where I was told I was going to have to pay $88. But it should be reflected as part of charges and I should receive an invoice," he said.

Mr Een Yuan Long, 27, also missed the part where he was told to pay the membership fee. He bought a $7 dust cover for clothes and was charged the $88 fee too.

"It's very cheeky," said the corporate trainer. "I was so angry about it because it wasn't obvious that I was being signed up for any membership. It was only apparent to me when the bill came."

Ms Vera Ong, 29, was charged $9.90 a month for three months on her credit card for membership. She called StreetDeal and the charges were halted, but she did not receive any refund, she said.

"Sure, it is my responsibility to read the terms and conditions but surely they should have proper forms for us to sign and fill out for subscriptions," said Ms Ong, who is self-employed. "If not, any business can make us pay subscription fees without our knowing."

A version of this article appeared in the print edition of The Straits Times on August 17, 2015, with the headline ''Membership fee' riles online shopper'. Print Edition | Subscribe