ACM fines online store TrendX for having misled consumers
The Netherlands Authority for Consumers and Markets (ACM) has imposed a fine of 100,000 euros on online store TrendX for having misled consumers in the sale of various consumer products. The online store posted positive reviews that were fake, and it hid negative reviews of actual customers. In addition, TrendX was unclear about the delivery times of orders.
Cateautje Hijmans van den Bergh, Member of the Board of ACM, explains: “Many consumers look at reviews first before buying something online. They assume that such reviews reflect the real-life experiences of consumers. That is why we take action against fake reviews. Consumers must be able to have confidence in the information that they come across. In addition, online stores need to be clear about delivery times, even if they engage in dropshipping. With this fine, we want to send a clear signal.”
What was this case about?
In early 2020, ACM received many reports about online store TrendX, and subsequently launched an investigation. ACM found that TrendX posted fake positive reviews on its website, but did not post negative reviews of actual consumers. Consumers wish to take into account the experiences of others in their purchase decisions. They use reviews as a check and a source of additional information. They see positive customer experiences as a sign of quality, and as a form of support in their decision-making. In this case, there were many consumers with negative experiences about the online store and the products on offer. However, visitors to the online store were not aware of this, because the negative reviews were not published. Moreover, the positive reviews did not reflect actual customer experiences. As a result, consumers were misled.
Also, TrendX did not give clear information about the delivery times of products. TrendX engaged in dropshipping. This means that a different company directly ships the products from abroad. This practice is allowed, but online stores still need to be transparent about delivery times. Consumers need that information in order to be able to make a well-informed purchase decision. As TrendX failed to give clear information about this, consumers were misled. They might have bought a product that they would not have otherwise.
During the investigation, the owner closed down the website TrendX.nl, but subsequently launched klooo.nl and continued their business on the same footing. Both websites have been taken down by now. When setting the amount of the fine, which is 100,000 euros, ACM took into account the company’s circumstances (financial or otherwise). With this fine, ACM sends a clear signal that online store that target Dutch consumers must inform consumers properly and clearly.
Awareness campaign on online shopping
To reduce the risks for consumers when shopping online, ACM recently launched its awareness campaign “Check before you buy” (in Dutch: “Eerst checken, dan bestellen”). Consumers are advised to check in advance reviews on independent review sites in order to determine whether or not the online store they want to buy something from can be trusted. In that way, they can avoid a waste of money.
The digital economy
The digital economy is one of the key priorities on ACM’s Agenda. The starting point is that consumers are fully able to reap the benefits of the digital society. With its oversight efforts, ACM helps realize that objective.