2 online shopping sites apologise for 'hidden' fee

Mr Gregory Costamagna, CEO of OlaPrice and StreetDeal, said those who wanted a refund were given one in credit.
Mr Gregory Costamagna, CEO of OlaPrice and StreetDeal, said those who wanted a refund were given one in credit.

Shoppers no longer enrolled as members by default; sites act after Case intervenes

Online shopping sites StreetDeal and OlaPrice, under fire for charging consumers a "hidden" premium membership fee, have sent a letter of apology to those affected.

The sites, which sell a wide range of items from clothing to home appliances, have also been tweaked.

Shoppers will no longer be enrolled in their membership scheme by default and will have to opt in for it. Membership fee will also be included in the total bill at checkout.

The Straits Times reported in August that the Consumers Association of Singapore (Case) was investigating the sites for the way they charged the fee, after consumers complained.

At that time, shoppers were enrolled as premium members by default, then asked to tick a small box at the bottom of the transaction page to acknowledge this.

However, the fee - $88 every quarter - was not included in the total price at checkout. This was because shoppers were given a two-day free trial before being charged, said Mr Gregory Costamagna, chief executive of both e-commerce sites, which are based in Singapore.

But irate shoppers said they did not even know they had signed up until they checked their credit card statements and noticed the charge.

Case received 201 complaints about StreetDeal's membership fee from January last year to October this year, more than triple the 49 such complaints in 2013 and 2012 combined. The consumer watchdog has received 17 complaints so far about OlaPrice, which was launched in March this year.

Speaking to The Straits Times last week, Mr Costamagna said his previous way of charging mirrored several e-commerce sites abroad.

"But we realise that in Singapore, customers are not familiar with it. The changes make it very clear now - there is no chance of a customer becoming a member without knowing it," said the 31-year-old, adding that the premium membership scheme has been replaced by two new ones. Instead of $88 every quarter, the new programmes cost either $4.90 or $9.90 monthly.

"We did not intend to mislead consumers in any way," said the Frenchman, who will also be making the changes to his StreetDeal and OlaPrice sites in Malaysia, the Philippines and Thailand.

Both sites have a total of over 2,000 premium members now.

The letter, sent out on Sunday, reads: "Our premium programme... has caused a lot of confusion. We would like to sincerely apologise for the frustration this has caused some of our customers."

The website changes and apology come after Case asked Mr Costamagna in August to agree not to engage in unfair practices and to sign a Voluntary Compliance Agreement (VCA) to that effect.

The Straits Times understands that the VCA has not been signed, but the changes to the sites were made after consultations with Case.

Mr Seah Seng Choon, Case's executive director, said: "We note the changes made. We also hope that he will refund all the affected customers who had unknowingly paid the membership fee."

When asked if he planned to do so, Mr Costamagna said he did not. But he said those who wanted a refund were given one in credit.

Mr Een Yuan Long, 27, bought a dust cover on StreetDeal last year for $7, but later found out that he was charged an extra $88.

He said: "Refunding in credit is unfair. The company is still benefiting from misleading people. I had no intention of spending that money with them in the first place."

Mr Smith Leong, 31, bought a set of musical drumsticks from StreetDeal in July for $16.40, and was also charged $88 more. He said: "Personally for me, it's not really about getting my money back. I am glad awareness has been created and changes made so that people don't get scammed any more." He has no plans to use the $88 credit he received as refund. "I did not bother to spend it because I was quite sceptical of another hidden charge."

A version of this article appeared in the print edition of The Straits Times on November 07, 2015, with the headline '2 online shopping sites apologise for 'hidden' fee'. Print Edition | Subscribe