Business Networking Services: Deceptive Online Selling and Failure to Provide Services



Case information

Case reference: CRE-E-25603

Complainant: OFT own-initiative investigation.

Investigation against: the operator of a website offering membership services for information technology personnel (the website).

At this stage of an investigation, the OFT would normally disclose the identity of the operator of the Website and the contact details of the Website, but there are, in this case, exceptional circumstances which oblige the OFT to consider that it is appropriate not to disclose this information.

Question: The OFT considered that there were deceptive online sales and failure to provide business networking services.

Relevant instrument: Protection of Businesses Against Deceptive Marketing (BPR) Regulations 2008.

Summary

This investigation was initiated by the OFT on its own initiative following a referral by Warwickshire Trading Standards of a business-to-business complaint it had received regarding the website.

The website was aimed at corporate IT staff and advertised a service that purported to offer, for a fee, business networking opportunities with senior IT directors from various blue chip companies. . The website described, visually represented and purportedly offered the use of a venue in central London, with, among other things, a members’ lounge, bars, restaurant and private meeting rooms.

The evidence before the OFT indicates that the content of the website was misleading insofar as, in reality, such premises do not exist. Also, the contact phone number on the website was wrong.

Reports to the OFT from companies that had sought to take advantage of these business networking opportunities allege that after payment, the website operator could no longer be contacted and did not provide the services. advertisement.

In light of this, the OFT considers that the operator of the Website, may have violated the prohibition of regulation 3 (1) of the BPR against advertising which misleads traders.

The OFT also considered that the website may have operated in violation of the 2002 Electronic Commerce Regulations (EC Directive) due to its inability to provide information (for example, a valid geographic address) that would allow consumers to contact the merchant quickly, directly and efficiently.

Despite pursuing a number of investigative leads during its investigation, the OFT was unable to open a line of communication with the operator of the website and therefore was unable to begin to legally pursue the matter directly with him. For example, evidence obtained by the OFT indicates that many geographic addresses provided by the website operator in various contexts are false.

In this context, the OFT expressed its concerns regarding the Site to the Internet service provider responsible for hosting this site. As a result, the website is no longer accessible to the public and the domain name has been suspended from the Nominet registry.

Despite removing the website from public view, its operator still has not come forward. In light of this, the OFT closed this investigation on the grounds of administrative priority. The information gathered during the investigation was, however, recorded for intelligence purposes.


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