Consumer rights - retailer stock status and holding your money

cflowers1981

To explain in more detail, O2 operate an online store where consumers can not only purchase phones on contract but other items too, in this case a smartwatch, the Moto 360. Whilst this particular case is about the smartwatch, the issue is across the board for other purchases. The community forum is littered with the same complaints.

On the 3rd October 2014 I placed an order for said product with O2. The stock status of the item was "in stock" at the time of ordering. I used my debit card to make the purchase of £199. The order went through successfully, I received order confirmation emails etc. The same day, the item went from in stock to out of stock. O2 offer a next day free delivery so I expected it would arrive the following Tuesday (3rd was a Friday and the cut off period, processed Mon for Tues delivery).

Long story short, Tues came and went and I received no dispatch email. I started enquiring via live online help system (useless...). Turned out that the item actually wasn't in stock when I ordered and my order had gone in to a pre-order status.

Now, I've no problem with pre-ordering an item when I know that's what I'm doing, however I was lead to believe I was ordering an item which was in stock. Anyway, I was nothing but patient with them but after waiting 4 weeks and receiving nothing, and O2 holding on to my money the whole time I requested a refund. Irritatingly they can't give it back as quickly as they take it and I had to wait 5 working days.

As an aside to this, there were others who ordered this item using a credit card who were told during ordering that their payment had failed, and to try again. It turned out that the payment was actually successful and consumers found their cards had been charged multiple times. Not so much of an issue with credit cards, but still something not right with O2's system.

So my issues with this are as follows:

1) legally are O2 breaking any laws by essentially 'tricking' consumers in to making a purchase under the impression the item is in stock
2) are they right to 'hold' the money in this circumstance
3) why can't they refund as quick as they take it
4) why are credit cards getting charged multiple times when the system says payment failed

As I said, this is not an isolated incident to one product, it happens regularly. However this particular case is highlighted here:

community.o2.co.uk/t5/Discussions-Feedback/O2-are-the-worst-EVER-Ordering-Moto-360/td-p/764629

Thoughts?

Fosterdog

cflowers1981 wrote: »

So my issues with this are as follows:

1) legally are O2 breaking any laws by essentially 'tricking' consumers in to making a purchase under the impression the item is in stock
They were probably not tricking customers, if they were doing that they would have continued to display the item as in stock for longer. The in stock status may well have been true but only one left with someone else ordering at the same time as you and their order clearing first. They may have had one in stock and when they've gone to pick it found it to be damaged or even accidentally broken it during picking. There are plenty of reason that many retailer advertise items as in stock but they are actually out of stock by the time an order goes through

2) are they right to 'hold' the money in this circumstance
If you didn't request the money back straight away how do they know that you don't want them to keep the money for them to honour your order as soon as they come back in to stock?

3) why can't they refund as quick as they take it
The retailer doesn't get the money straight away, it leaves your account and takes a few days in the banking system before the funds clear in their account, they send the items out before they get the money because they used a third party to authorise the payments. They may issue a refund straight away but it takes equally long for the funds to clear back in your account. This is more to do with how the banks work than the retailer.

4) why are credit cards getting charged multiple times when the system says payment failed
This is something that the customers who got double charged would need to have investigated, it may be as simple as they payment not being taken twice but the bank placing the failed payment into a holding account which reverses after a day or two. Again this is more likely to be an issue with the bank or the third party authorising payments than the retailer themselves. Around a year ago Streamline had an issue that was double authorising payments that affected several retailers that used them.

It is inconvenient what has happened but there is a perfectly reasonable explanation for it