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Auto Parts Site Fined for Charging Consumers a "Cancellation" Fee for Delayed Shipments

WASHINGTON, Dec. 20, 2001 -- An auto accessories ecommerce site will pay a $15,000 fine for charging a "cancellation" fee to consumers whose shipments were delayed.

The Federal Trade Commission said that Salesco of San Dimas, Calif., violated the FTC's Mail or Telephone Order Merchandise Rule by making unsubstantiated shipment representations and failing to provide consumers with timely and complete delay notices.

The Commission also alleged that the defendants violated the Rule by substituting merchandise that was materially different from what consumers ordered without the consumers' prior consent, and by charging consumers a 20 percent "cancellation" fee when consumers cancelled because of delayed shipment.

Besides the fine, Salesco will pay refunds to consumers who were illegally charged for cancelling a delayed order.

"The Mail or Telephone Order Merchandise Rule guarantees that consumers get what they ordered -- and get it when it was promised," said FTC's Bureau of Consumer Protection Director Howard Beales. "The FTC expects catalog, telephone, and Internet retailers to deliver the goods as required by law, not only because it's good business, but because it enhances consumer confidence."

The FTC's Mail or Telephone Order Merchandise Rule covers - in addition to orders by mail - orders by any "direct or indirect" use of the telephone, including orders by Facsimile or the Internet.

Salesco sells automobile accessories including audio equipment, seat belt extensions, canopies, chrome plated wheels, dashboards, seats, carpet kits, and car covers to consumers throughout the United States via mail order, telephone, and the Internet.

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