Buyers offered refunds under Stores Online settlement

Stores Online International Inc will offer refunds to some customers who bought its website packages following settlement of an Australian Competition and Consumer Commission legal action.

The refunds will come from $658,251.53, previously frozen under a Federal Court order.

In addition, StoresOnline:

• has undertaken not to make false or misleading statements about its website packages nor make statements about the future performance of the packages without having reasonable grounds for so doing
• will give future customers a three-day 'cooling off' period, and
• will contribute to the ACCC's legal costs.

The settlement of the proceedings was entered into by StoresOnline upon the basis that it did not admit that it had engaged in any conduct in breach of the Trade Practices Act 1974. Stores Online International Inc and StoresOnline Inc are Utah, USA based companies that offer packages of websites to customers to establish e-commerce businesses.

"In reaching the settlement, the ACCC was aware of the importance of getting a practical solution for StoresOnline customers who believe that they have been misled into buying the products", ACCC Chairman, Mr Graeme Samuel, said today.

"Of primary importance was how to obtain compensation on a timely basis. The ACCC believes that this settlement allows disaffected StoresOnline customers to obtain quick redress. Also, it prevents representations which may mislead future StoresOnline customers from being made".

Buyers of the StoresOnline website and software package who want a refund should contact the ACCC urgently by 9 June 2006 for instructions about seeking a refund.

"This deadline will be strictly adhered to under the settlement agreement", Mr Samuel said. "Purchasers who do not contact the ACCC by 9 June 2006 will not eligible to take part in the refund scheme".

Buyers have 30 days from the date of the ACCC's letter to provide a statutory declaration that the StoresOnline website and software package is defective or that they bought the package because of a representation of the sort alleged in the ACCC's Amended Statement of Claim (as detailed in the background to this news release) stating which representation they relied on.

Statutory declarations not received within 30 days of the date of the letter will not be considered for a refund.

The ACCC has discontinued its proceedings against StoresOnline's Australian representative, Mr Brett Perkins.

Consumers should contact the ACCC's Infocentre on 1300 302 502 for further information.

Background

The ACCC instituted proceedings against StoresOnline and its Australian representative, Mr Brett Perkins, alleging that StoresOnline was misleading and deceptive in its promotion and sale of websites for home-based internet businesses, in breach of sections 51A, 52, 53(aa), 53(c), 53(e), 55A and 59 of the Trade Practices Act 1974.

The ACCC alleged that StoresOnline represented that:

• by using the StoresOnline package, profitable online retail businesses could be quickly and easily developed by people with limited computing or business experience working from home
• accessible and prompt technical support would be available at no further cost
• the package contained all that buyers could reasonably require to set up and operate a profitable online retail businesses from Australia.
• the current prices were lower than the price at which the package, or components, had been offered for sale in Australia previously
• for a one-off additional fee of $999, buyers would get a payment processing facility free
• testimonials given by an existing Australian customer were accurate about the use and profitability of his website.

StoresOnline travels to Australia to promote and sell websites and supporting software packages in each State. Generally attendees receive unsolicited invitations to a free seminar. At the seminar attendees are invited to an all day workshop which is promoted as an Internet Training Workshop or Internet Cashflow Workshop. The websites are sold in packages of three or six at a cost of approximately $2,500 and $5,500 respectively.

Following complaints from around Australia and ACCC investigations, proceedings were instituted on 1 June 2005 whereby the ACCC obtained orders on an ex parte basis including:

• an injunction preventing StoresOnline from transferring funds outside Australia, and
• that before seminars and workshops in Australia began, StoresOnline told attendees that the ACCC had brought proceedings in the Federal Court seeking orders restraining StoresOnline from making misleading and deceptive representations.