December 8, 2008 Archives

In just ten years, Amazon has become one of the most trusted names in shopping. It has a reputation for being cheap, convenient and, usually, reliable. But the company has branched out, and unless it's careful, it could lose its hard-won reputation. Watchdog reveals the biggest - and perhaps most respected - name in online shopping is selling goods that are counterfeit, dangerous, and even banned in the UK.

Watchdog researchers used the Amazon website to purchase CS gas and pepper spray - both of which are illegal to buy, sell or carry in the UK. But on Amazon, they can be bought for as little as £1.70.

The team also found that some of the items advertised on the site's 'Marketplace' section - which accounts for a third of its sales, according to Amazon - were non-existent, and advertised fraudulently by third-party sellers to obtain cash.

Amazon's Marketplace allows anyone from around the globe to advertise goods for sale alongside Amazon's own stock. Clicking on 'Used and New' takes you to the Marketplace section of the company's website. Goods advertised here are for sale by third parties, but still appear under the Amazon banner. Indeed, Amazon takes a cut from every purchase.

Trading Standards officer Paul Miloseski-Reid was shocked that the CS gas and pepper spray - sent from a seller in Germany - were so easily available on Amazon.

"We're talking about something that's officially classed as an offensive weapon. It's not a grey area, it's black and white. The law says you cannot possess these items in the UK. Certainly for things that are clearly illegal there should be systems in place to stop them even getting on the site."

Amazon even sent Watchdog its usual email saying that the CS gas and pepper spray had been dispatched.

We began our investigation into Amazon Marketplace after hearing from viewers who had been ripped off while shopping there.

Rupert Joel replied to an ad for a 40-inch Sony Bravia flatscreen TV. It was advertised for sale by a third party seller and was priced around half what it would cost from Amazon's own stock.

Rupert says: "I emailed the seller and said, why is this so cheap? He replied straight away and said it was ex-demo, boxed with a 30-day guarantee, and a 12-month guarantee as well. I had no reason to doubt it because it was all on the Amazon website."

Rupert got an email that appeared to be from Amazon instructing him how to pay by MoneyGram.

Rupert contacted the seller to question why he couldn't pay through the site and was told that Amazon's payment system was not working. Rupert agreed to use MoneyGram and paid the money, but it turned out the email was a fake, and he'd been scammed out of £300. When he complained to Amazon, it said it was nothing to do with them - even though the scam was done through its site.

Eloise Burke told Watchdog she bought some hair straighteners from a seller on Amazon Marketplace. Six months later they broke, so she returned them to the manufacturer. She was horrified when they told her that her straighteners were counterfeit. And when she took it up with Amazon, it told her as she was now outside the Marketplace's 90-day return policy, there was nothing they could do.

She says: "They haven't vetted their sellers properly, and they haven't realised that their marketplace is selling fake items to people who trust the Amazon name".

Two years ago, Watchdog revealed that fake goods were being sold on another major shopping site, eBay. But an online security expert told us that Amazon has less protection.

Max Vetter, from the Counterfeiting Intelligence Bureau, says: "The systems that Amazon has in place at the moment to stop counterfeit goods on their site are woefully inadequate. Compared with eBay, Amazon doesn't seem to have any system in place that could quickly remove counterfeit goods from its sites".

A recent survey claimed that Amazon - who last week launched a new music download service - is likely to be used by around 70 per cent of shoppers this Christmas.

In the past, Amazon has compared the Marketplace to a shopping mall - it provides the framework for other people and businesses to sell its goods, but it is not responsible in any way for the individual sellers, or what they sell.

Fake, dangerous, and illegal goods have no place in UK stores, on the high street, or online. Marketplace has the Amazon name on it, which makes it Amazon's responsibility. It's about to have one of its busiest Christmases ever, it's just a shame it seems to have no idea what it's actually selling.

Brian McBride, managing director at Amazon.co.uk, came into the Watchdog studio to speak with about selling counterfeit and dangerous goods on the internet. You can watch Nicky Campbell interview him in the video clip at the top of this page.

Watchdog update Monday 22 December 2008

Earlier in December we exposed a serious problem with Amazon.co.uk. Some of the sellers on its Marketplace were advertising fake and even dangerous goods. We bought CS gas and pepper spray.

It's a problem Amazon has now addressed. Since then we've seen no adverts for any of the products we'd been able to buy.

In the past year alone energy bills have risen by a staggering 40 per cent, and there's little sign of them coming down. But is there another way to tackle the escalating prices? Watchdog has received a number of complaints about a particular energy company whose claims are landing them in hot water.

Since the report on 8 December we've had a big response from people wanting to know which claims you can trust, and which you need to take with a pinch of salt. So we put some of your questions to the Energy Saving Trust.

Original report from 8 December
Oil, electricity and gas are polluting and expensive. Wind, sea and sun are clean and free. So wouldn't it be great if you could tap in to nature to produce your energy at home?

Thousands already have with solar panels which use the power of the sun to heat up their water.

Salesmen making big promises for the environment
Solar panels can be great for the planet but there's one company that claims it will be great for your wallet too. Its salesmen make out that panels like these will preserve the ice caps and your cash, knocking at least 75 per cent off your hot water bills.

It is tempting. Especially when the company puts it another way - saying it could slash your total gas bill by 60 per cent.

It's called Solar Direct UK Limited. Its website says it has been in business for over 15 years, with thousands of satisfied customers.

Paying over the odds
Terry O'Leary bought Solar Direct UK Ltd's panels because he thought they made sense for the environment and for him. What he didn't know, is he'd paid way over the odds for the system - a whopping £7,500. A system on an average house normally costs between £3,000 and £5,000.

Alan Griffin says the company's salesman lied to his 85-year-old Dad when he sold him a solar-powered hot water system.

The system cost £6,500, but the salesman promised Jack Griffin and his wife it would cut so much off their gas bill that it would pay for itself in just five or six years. Their son feels they were duped.

He says: "I did a few calculations to see what the payback time would be and it was 60 years, if at all, ever."

So, Solar Direct uses promises that just aren't true, to sign you up to something that's not just expensive, it won't do what it claims. And that isn't a complete surprise.

Two years ago the parent company of Solar Direct UK Limited - Simplee Solar Limited was forced to pay out £40,000 after being prosecuted for exactly that. The man behind the case was Ivan Hancock from Dorset Trading Standards.

He says: "Back in 2006 they were prosecuted for offences under the trade descriptions act, they were making false claims in flyers and we challenged that, and they were found guilty after a case in the Crown Court in Bournemouth."

In October, a new law came in forcing companies to give all customers who sign a contract in their own homes a seven-day cooling off period. But that's a law Solar Direct seems happy to ignore.

In secret filming conducted by Watchdog, one Solar Direct salesman asked us to give up our cooling off period and under the new law he just can't do that.

Not complying with new legislation
Ivan Hancock says: "I'd like to hear from the company as to why it thinks it can exclude itself from complying with this new legislation. There are certain get outs, but in my view there would be a breach of the new regulations dealing with cancelation of contracts in consumer's homes."

When Watchdog contacted Solar Direct it told us that since its parent company Simplee Solar was convicted under the trade descriptions act it has: "...Made a number of changes to the way it sells its products. In particular, customers are given several opportunities to express satisfaction or dissatisfaction with their product."

It adds that it has "thousands of very satisfied customers who are achieving the sort of savings that are possible from our units."

Solar Direct insists it "remains committed to providing a quality product at a fair price" and that "the number of complaints we receive is minimal."

One of the fundamental principles of English law is that you're innocent until proven guilty, and if anyone should know that it's a lawyer. But it's lawyers who are sending many of you frightening letters which appear to assume you're guilty of something that you might not have done, demanding money, and threatening even worse if you don't pay up.

Frightening letters
The letters are coming from a London-based company called Davenport Lyons, one of the most respected law firms in the UK. So much so, we've even used them here at Watchdog, but then we hadn't received the 18-page letter it sent Barbara Burch, asking for £600 compensation. It accused the mother of two of breaching copyright on a computer game called Two Worlds. "This is not right, I've not done it," Barbara told Watchdog. "I've never heard of the company, I've never heard of the game. It's not possible because I was babysitting for a friend's child at the time, so no, it's not possible."

But the letter from Davenport Lyons was quite convincing, saying that unauthorised use of the game had been traced to Barbara's computer system. Davenport Lyons said it was acting on behalf of the games rights' owner, Reality Pump, and it said it had proof of the date and time of the alleged breach of copyright. But when Watchdog sent Barbara's computer to expert Nigel Pugh from Forensic Footprints, it turned out that the game had never been on her computer at all.

Alan Guest received one of Davenport Lyons' letters, too. This time the firm said it was acting on behalf of another computer game company Atari, and Alan was accused of the illegal use of one of its games. He says: "I was 100 per cent confident I hadn't downloaded it. But, you know at the same time, you never know what can happen if it's your word against their word."

The letter asked Alan for £500 compensation because he'd allowed the games' copyright to be breached. He was also warned that he'd face much higher costs if Davenport Lyons had to take the case further. Alan's partner Heidi was so worried by the content of letter, she thought they ought to pay it, but Alan decided to fight it all the way. "I'm up for it - let them take me to court. I didn't do it, so bring it on - that's what I say." Watchdog had Alan and Heidi's computer checked out, too. And again there was no sign of the game.

Hard-core allegations
It's one thing being accused of uploading computer games when you haven't, but some of the accusations coming from Davenport Lyons are a bit more hard core. It has also been sending letters to people accusing them of breaching the copyright of a gay porn film. The film is so X-rated, we can't even tell you its title, but it certainly surprised the people, including a married couple in their 70s, who Davenport Lyons wrote to about it.

Online piracy
Davenport Lyons says it's writing the letters after being given evidence of illegal use of its clients' work on internet file sharing sites. These are sites where you can download and upload copyrighted material for free. It's online piracy and although Davenport Lyons' tactics seem heavy handed, they're actually acting on the instructions of their clients, the copyright owners.

Digital fingerprints
The accusations rest on evidence from internet tracking data. Every time you connect to the internet you leave behind a digital fingerprint called an IP address. According to Davenport Lyons, Alan and Barbara's IP addresses have been found illegally sharing their clients' works. Using a High Court order, they have then forced Alan and Barbara's internet service provider to hand over their names and addresses.

But Michael Coyle, a lawyer representing nearly 400 people who've had one of the letters, doesn't think using just an IP address as evidence is conclusive enough. He says: "Until you actually inspect the computer itself, there's no way of knowing if an individual has committed an act of copyright infringement, you have to take the hard drive and inspect it. It's nonsense to suggest that someone has committed a copyright infringement simply by an IP address."

That's because while fingerprints are impossible to fake, IP addresses aren't. According to Stuart Taylor from internet security firm SOPHOS, it's relatively simple, and the easiest way to do it is to tap into one of the many unsecured wireless internet connections most of us have these days.

Insecure wi-fi
Driving around a residential street in Hertfordshire, Stuart showed Watchdog how an IP address can be used without the owners' knowledge. With his laptop switched on, he picked up 30 to 40 wireless internet signals, most of which were secure with password protection, but three or four were not. Within seconds he was able to connect to one, and could have started downloading. If he wanted to download or upload anything illegal, he could have done so straight away, without the knowledge of the connections' owner. Was this how Barbara and Alan found themselves in trouble with Davenport Lyons?

Liability
Reality pump, who instructed Davenport Lyons to enforce the copyright of its game Two Worlds against Barbara Burch, sent a written response to Watchdog.

"Having an unsecured wireless network makes you liable for all the harm done using that network, because you set the cause for the harm done. It's comparable with installing a bath yourself in a bathroom located on a first floor flat. If it then leaks and water goes into the flat below, causing damage to property, you will be liable for all the damage caused." "We believe that letters are only sent to people who are liable for the copyright infringement of our product."

Shocked and disappointed
Games company Atari defended its decision to protect games from illegal copying but said Davenport Lyons was no longer acting on its behalf.

Atari says: "The costs and lost revenue caused by the widespread illegal copying of games causes much damage to our industry, directly affecting the many talented creative people developing the games, and also our customers. Taking action to defend our rights is necessary, but it is very important to us that any action taken is fair and appropriate. We believed that Davenport Lyons' methods were totally reliable and accurate. We were shocked and extremely disappointed when we found that they had incorrectly accused one household of illegal copying. As a direct result we told Davenport Lyons to take no further action on our behalf."

Davenport Lyons' response
"Intellectual property theft is a serious matter and these claims are by their nature complicated. Our letters reflect this and are legally correct. We write to account holders whose IP address has been used to upload our client's copyright material onto file sharing sites, and who therefore have a strong case to answer. However, we are happy to take on board people's comments and are reviewing the content of our letters with a view to making them clearer and easier to respond to."