Irritation, Unfairness, Deception, And Fraud
Direct-n arketing excesses sometimes annoy or offend consumers. Most of us dislike direct-response TV commercials that are too loud, too long, and too insistent. Our mailboxes fill ur with unwanted junk mail, our e-mail boxes fill up with unwanted spam, and oui compute* screens fill up with unwanted pop-up or pop-under ads.
Beyond irritating consumers, some direct marketers have been accused of taking unfa.’ advantage of impulsive or less-sophisticated buyers. TV shopping channels and program-loni “infomercials” targeting television-addicted shoppers seem to be the worst culprits. They feature smooth-talking hosts, elaborately staged demonstrations, claims of drastic price red_: tions, “while they last” time limitations, and unequaled ease of purchase to inflame buye who have low sales resistance.
Worse yet, so-called heat merchants design mailers and write copy intended to misleaf buyers. Evan well-known direct mailers have been accused of deceiving consumers. A .years back, sweepstakes promoter Publishers Clearing House paid $52 million to settle acations that its high-pressure mailings confused or misled consumers, especially the elderly, in J believing that they had won prizes or would win if they bought the company’s magazines m Fraudulent schemes, such as investment scams or phony collections tor charity, haw multiplied in recent years. Internet , including identity theft and Financial scams, has beion a serious problem. Internet-related complaints accounted for 46 percent of the 431,000 fraud complaints received by the FTC lost year, resulting in monetary losses of more than $335 million. And last year alone, the Fculoral Internet Crime Complaint Center (ICS’) received almost 232,000 complaints related to Internet fraud, a whopping 368 percent increase from 2002.60
One common form of Internet fraud is phisking, a type of identity theft that uses deceptive e-mails and fraudulent Web sites to fool users into divulging their personal data. According to one survey, half of all Internet Users have received a phishing e-mail. Although many consumers are now aware of such schemes, phishing can be extremely costly to those caught in the Net. It also damages the brand identities of legitimate online marketers who have worked to build user confidence in Web and e-mail transactions.61
Many consumers also worry about online security. They fear that unscrupulous snoopers will eavesdrop on their online transactions or intercept their credit card numbers and make unauthorized purchases. In a recent survey, six out often online shoppers were concerned enough about online security that they considered reducing the amount of their online holiday shopping.62 Such concerns are costly for direct-marketing companies. A recent study indicated that almost 30 percent of North American consumers wiio have been online but haven't made :i purchase cited concerns about credit card fraud ana other factors as holding them bach Ai ’b • tu Jy predicts that annual online sales could be as much as 25 percent higher if consumer security concerns were adequately addressed.63
Another Internet marketing concern is that of access by vulnerable or unauthorized groups. For example, marketers of adult-oriented materials have found it difficult to restrict access by minors. In a more specific example, a while back, sellers using eBay found themselves the victims of a 14-year-old boy who’d bid on and purchased more than $3 million worth of high-priced antiques and rare artworks on the site. eBay has a strict policy against bidding by anyor e under age 18 but w'orks largely on the honor system. Unfortunately, this honor system did little to prevent the teenager from'taking a cyberspace joyride.64