E-commerce site draws gripes over membership fees

A screenshot of OlaPrice's transaction page showing a small box at the bottom, with a Terms & Conditions statement, for customers to tick.
A screenshot of OlaPrice's transaction page showing a small box at the bottom, with a Terms & Conditions statement, for customers to tick.PHOTO: OLAPRICE

OlaPrice customers say they were not aware of extra charge at $88 per quarter

Another e-commerce website has gotten into trouble over the way it charges customers premium membership fees.

OlaPrice, launched in March this year, has received 17 complaints from consumers so far, according to numbers from the Consumers Association of Singapore (Case). The complainants said they had been charged the fees - $88 per quarter - without their knowledge.

OlaPrice's chief executive, Mr Gregory Costamagna, also runs e-commerce website StreetDeal. The Straits Times reported last month that consumers had complained about StreetDeal over hidden membership fees. Case has received 87 complaints about StreetDeal's membership charges between January and September this year, and is currently investigating the matter.

The complaints against OlaPrice are very similar.

One consumer, Mr Manish Nathwani, had bought a shower head for $8.80 from OlaPrice in June. The IT consultant was shocked to discover later on his credit card bills, that the firm had charged him an additional $176 for membership fees - in two charges of $88 each, one in June and the other earlier this month.

"At no point was I aware that I had agreed to such a charge," said Mr Nathwani, 40. He has made a police report and written to the authorities on the matter.

When The Straits Times visited the OlaPrice site yesterday, it found a small box at the bottom of the transaction page, which consumers are required to tick before making a purchase. Next to the box is this sentence: "I acknowledge that I have read, understood and agreed with the Terms & Conditions and Subscription terms and I accept to be charged sgd88 quarterly".

When contacted, Case executive director Seah Seng Choon said: "This is not acceptable. The problem is that many consumers miss this bit; they think they are only agreeing to terms and conditions."

He said Case is working with Mr Costamagna to increase the size of the sentence, and include the charge as a separate element. The association has also invited Mr Costamagna to sign a Voluntary Compliance Agreement. By signing it, the retailer agrees not to engage in unfair practices.

Speaking to The Straits Times yesterday, Mr Costamagna said several thousand shoppers have bought items from OlaPrice since its launch. Of these, about 1,000 are premium members, and complaints make up just 1 to 2 per cent of its premium members, he said.

"It's clear on the website. We mention this charge, and customers are asked to click on a box," he said, adding that such charging models are used at other e-commerce sites. "The issue is education. We are still in discussions with Case on how to improve the customer experience."

He added that one of its plans is to send customers an e-mail before the membership charge is levied.

Mr Nathwani, however, is not convinced. "This is not the way to sell someone a membership," he said, adding that many people do not check their credit card statements. "What they are doing is very misleading and sneaky."

A version of this article appeared in the print edition of The Straits Times on September 30, 2015, with the headline 'E-commerce site draws gripes over membership fees'. Print Edition | Subscribe