Shopping.com under fire

Shopping.com has received hundreds of customer complaints over purchase delays and lack of company response in recent weeks, the latest in a series of troubles to have beset the young Internet company.

Postings on public newsgroups complain of constant busy signals on Shopping.com's customer service number and a failure to respond to email messages. In addition, when products are not shipped because they are out of stock, customers say Shopping.com has been slow to contact their credit card companies.

"While Shopping.com shows a very thorough customer support infrastructure, they have not responded to any of my dozen of emails requesting information on my orders," customer Filippo Morelli said, adding that he has not been able to get through to the customer service phone line either. "I've gotten nothing, but been billed for everything."

Morelli added he has filed a complaint with the Better Business Bureau and the California State Attorney General's Office with allegations of consumer fraud. He had ordered about $1,500 in computer products October 13 but has not received any products.

Shopping.com executives acknowledge that they have encountered such trouble as slow customer response, late deliveries, and difficulties in fulfilling orders in the last month. But chief executive John Markley played down the problems, saying, "We had a blip here but we'll recover."

Shopping.com is in the final process of securing a "significant investment" by a Fortune 200 company, Markley said, a deal that will give the company much-needed resources to address customer concerns. He declined to name the company but said an announcement was only "a week away."

The company encountered a surge in its sales volume about 30 to 40 days ago, after it was added to an Internet site, Markley said. "We had expected our orders to increase, but we had no idea how much it would increase," he said, adding that the company's business grew tenfold to $300,000 in daily orders.

But Shopping.com's problems date earlier than the last four weeks. Since January, customers have filed 56 complaints against the company with the Better Business Bureau of the Southland, a business watchdog organization covering Los Angeles, Orange, Riverside, and San Bernadino counties in Southern California.

"That's a pretty significant number," said Gary Almond, general manager of the Southern California BBB. Almond, who noted most of the complaints are similar to those posted on newsgroups, said people who make purchases online tend to be more technologically sophisticated and "expect a higher level of service since it's a technology company."

The complaints are not the first time Shopping.com has encountered public controversy since its founding in 1996. Last September, an arbitration panel ordered the company's underwriters had to pay out $400,000 over allegations of inflating its stock price.

The Securities and Exchange Commission, meanwhile, is investigating the company and its underwriters in connection with the stock transactions, according to a Shopping.com SEC filing. The SEC has not alleged any violations, the filing stated, and the company is cooperating with the inquiry.

Addressing the recent customer concerns, Shopping.com chairman Frank Denny said: "The amount of complaints we've received is minimal compared to any other retailer that does the same amount of [dollar] transactions as us. But I would say that in the last 30 days the complaints have increased."

Two Web sites, Excite and CNET's Shopper.com, have removed Shopping.com from their lists of e-commerce sites to visit. (CNET: The Computer Network publishes News.com.)

"It was not this complaint on its own that prompted us to take down Shopping.com. It was cumulative feedback and strategic decisions about the site," an Excite spokeswoman said.

CNET spokeswoman Karen Wood said Shopping.com "understood that there were some things that they needed to address, and we took them down with their cooperation until those things could be fixed."