Business networking services: misleading online selling and non-provision of services
- Competition and Markets Authority
- 1 November 2010
- 1 March 2010
- 1 November 2010
- Case type:
- Consumer enforcement
- Case state:
- Market sector:
- Consumer enforcement - changes to business practices agreed
Office of Fair Trading (OFT) closed consumer enforcement case.
Case reference: CRE-E-25603
Complainant: OFT own-initiative investigation.
Investigation against: the operator of a website offering membership services to information technology personnel (the Website).
At this stage of an investigation, the OFT would normally release the identity of the Website operator, and the details of the Website but there are, in this case, some exceptional circumstances which means the OFT considers it appropriate to withhold these details.
Issue: The OFT formed the view that there was misleading online selling and non-provision of business networking services.
Relevant instrument: Business Protection from Misleading Marketing Regulations 2008 (BPRs).
This investigation was opened by the OFT on its own initiative following a referral by Warwickshire Trading Standards of a business-to-business complaint it had received about the Website.
The Website was targeted at business information technology personnel and advertised a service which purported to offer, for a fee, business networking opportunities with senior IT managers in various blue chip companies. The Website described, visually depicted and purportedly offered use of a venue in Central London, complete with, amongst other things, members' lounge, bars, restaurant and private meeting rooms.
The evidence before the OFT indicates that the Website's content was misleading in that, in reality, no such premises exist. Furthermore, the contact telephone number listed on the Website was false.
Representations to the OFT from businesses who had sought to take advantage of these business networking opportunities allege that, after payment was made, the operator of the Website subsequently could no longer be contacted and failed to provide the advertised services.
In light of this, the OFT considers that the operator of the Website, may have breached the prohibition in regulation 3(1) of the BPRs against advertising which misleads traders.
The OFT has also formed the view that the Website may have been operating in breach of the Electronic Commerce (EC Directive) Regulations 2002, due to its failure to make available information (for example, a valid geographic address) that would enable consumers to contact the trader rapidly and in a direct and effective manner.
Despite pursuing a number of lines of enquiry during its investigation, the OFT has been unable to open up a line of communication with the operator of the Website and has therefore been unable to begin legally pursuing the matter directly with him. For example, evidence obtained by the OFT indicates that numerous geographic addresses provided by the operator of the Website in various contexts are false.
In light of this, the OFT expressed its concerns regarding the Website to the internet service provider responsible for hosting this site. As a result of this, the Website is no longer publicly available and the domain name has been suspended at the Nominet registry.
Despite the removal of the Website from public view, its operator has still not come forward. In light of this, the OFT has now closed this investigation on the grounds of administrative priority. Information gathered during the investigation has however been recorded for intelligence purposes.
Published: 1 November 2010
Opened: 1 March 2010
Closed: 1 November 2010
Case type: Consumer enforcement
Case state: Closed
Market sector: Communications