Wednesday, January 7, 2004

Shopping from home: Breaking down the online barriers

Congress is about to pass legislation that will give consumers new protections against identity theft, including free credit reports annually and a national fraud-alert system to minimize damage once a theft has occurred.

Why? “Because identity theft is reportedly the fastest growing crime in America,” said Richard Roll, consumer advocate and president of the American Homeowners Association. “It affected almost 10 million people in the last year alone, according to the Federal Trade Commission. It happens offline. It happens online.”

He notes that a survey by research firm Gartner a little more than a year ago (Sept. 2002) found that 7 percent of adult online consumers surveyed had been victims of credit-card fraud, and 1 percent reported having their identities stolen.

“As we approach the madness of the holiday shopping season - and this year Hanukkah, Christmas and Kwanzaa are all just six days apart — we have to know that it’s a great time of the year for identity thieves,” said Roll. “We particularly know it this year thanks to Citibank and its memorable ad campaign on the subject.

“In the last year alone, consumer victims reported $5 billion in identity-theft-related out-of-pocket expenses,” he added. “To fight back, consumers are often left to fend for themselves or purchase expensive stand-alone policies that can cost $10-20 per month. But that’s a high price to pay.”

According to Roll, another barrier to online shoppers, although not so dramatic as identity theft, is the high cost of shipping. Consumers can save in the 10-30 percent range on the cost of products by comparison-shopping online, he pointed out, but “consumers usually get a rude awakening at checkout, where shipping costs on such items as CDs, DVDs and toys can add 20-50 percent to their bills, thereby wiping out their hard-won savings.”

Such leading merchants as Amazon, he said, have led the way by offering free-shipping deals for a couple of years now. But most often, free shipping is available only at certain times for a limited period of time, on certain items and on orders of certain sizes, typically a lot more than what a couple of CDs or toys would cost.

The final blow, said Roll, is that the consumer can forget about speedy delivery with these special shipping offers, which usually restrict delivery to the slowest method of “standard delivery.” This means that delivery of goods often takes more than a week, an especially irksome factor as the holidays approach and consumers are engaged in a lot of last-minute shopping.

In an attempt to remove these two formidable barriers, Roll reports that AHA has just introduced a unique online shopping service for AHA members. Called Froople! (www.froople.com), it provides the best in comparison shopping, letting consumers find the lowest prices, and also allows consumers to shop at top-brand online retailers and have their shipping charges rebated up to $25 per order, up to $500 a year, through cash-back rebates, which apply regardless of order size or delivery speed. “This will become more and more important to consumers as the number of days left till the holidays tick away,” he said.

Besides knocking down the shipping-cost barrier, Roll says that AHA also is helping to remove the concern about identity theft. “Shoppers who sign up at www.froople.com or call 1 866-FROOPLE to join the association, receive identity-theft coverage that includes income protection, expense reimbursement, an ID recovery kit and 24/7 toll-free assistance, included as part of membership,” said Roll. “Our group policy will cover member out-of-pocket costs up to $2,500, which, after a $250 deductible, is twice the reported average $1,200 in out-of-pocket expenses experienced by identity-theft victims. In addition, the typical case requires 175 hours to correct ‘mis-identity,’ which can be vastly shortened by the support line.

“The attention that Congress is paying to the issue of identity theft in this country is laudable,” added Roll, whose testimony before Congress — in 1993 before the U.S. House Banking Committee and in 1997 before the U.S. Senate Banking Committee — influenced mortgage-related legislation that has reduced costs to homeowners by billions of dollars. “But we still need to find ways in our own backyard to help. Giving shoppers peace of mind is AHA’s individual effort.”

For more information, go to www.froople.com or visit www.ahahome.com.

Back to Home & Garden Home Page | Back to the top of the page