The Web Opens Up a Whole New World of Complaints

The Internet boom has spawned a new category of double-digit growth: consumer complaints.

Consumer protection agencies recorded a 39% jump in complaints about Internet service providers and online merchants and auction companies that do business on the Web, according to a national survey released Tuesday.

Despite the spurt, Internet-related complaints failed to crack the top 10 complaint list. Auto sales, auto repairs and home-improvement claims ranked as the top three targets of consumer gripes, each listed by about 70% of the consumer protection agencies surveyed.

The findings, contained in the eighth annual report from the National Assn. of Consumer Agency Administrators and the Consumer Federation of America, came from a survey of complaints received by 50 consumer agencies last year.

Still, complaints about the Internet grew faster than any other kind of grievance and came as little surprise to technology analysts.

Consumers are constantly searching the Internet for the cheapest goods and services they can find and “that leads to terrible customer service,” said Patrick Keane, an online analyst with Jupiter Communications in New York. “This is really a lesson of caveat emptor [let the buyer beware], and consumers are learning it the hard way.”

A frequent complaint among Internet users was that Internet service providers, or ISPs, overcharged for their services, said Wendy Weinberg, executive director of the National Assn. of Consumer Agency Administrators in Washington.

In some cases, ISPs automatically renewed service and billed customer credit cards without permission, Weinberg said. Other complaints involved ISPs that told customers they could dial in on local access lines but ended up with hundreds of dollars in long-distance phone bills.

The biggest Internet service providers used to be guilty of such abuses, Keane said. But now the problems are concentrated among the “hundreds--if not thousands--of fly-by-night ISPs out there,” he said.

Electronic commerce and auction sites also came under fire for failing to ensure that shoppers got what they paid for. In some cases, items arriving on customers’ doorsteps were not what they expected or never arrived at all, Weinberg said.

With 40 million American households now online and the Internet audience growing more than 30% each year, the volume of consumer complaints will keep rising, said Gary Arlen, president of Arlen Communications, a new-media research firm in Bethesda, Md.

“You’re getting less experienced users who don’t know what they’re buying or what they’re getting into,” he said. The problem is particularly acute on sites that offer new ways of shopping, such as the online auctions available at EBay and the name-your-own-price deals by Priceline.com, he said.

Still, Arlen said, “It’s hard to imagine there will be as many people complaining about this compared to everything that goes wrong with cars and auto repair.”

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Gripe Central

Internet companies are drawing more complaints, but still didn’t make 1998’s top 10 list. Percentages reflect number of consumer agencies citing each sector.

Sources: National Assn. of Consumer Agency Administrators, Consumer Federation of America 1. Auto sales: 72%

2. Auto repair: 70

3. Home improvement: 68

4. Household goods48

5. Credit and lending: 40

6. Mail order: 24%

7. Auto leasing: 20

7. (tie) Landlord-tenant: 20

9. Utilities: 18

10. Travel and tourism: 16