Commerce Commission investigates 60 Dick Smith complaints 

The Commerce Commission is investigating 60 complaints – including 47 made over the past three days – and is warning consumers to be wary when buying goods through the Australian-based website. It says anyone purchasing goods through Dick Smith should read the fine print carefully when doing so and “if in doubt, opt out”.

Consumer NZ has spoken to three customers, and received emails from several more, who recently purchased goods through the company's website. They were later charged $149 for a year-long membership to be signed up to ‘First’, a service owned and operated by Kogan, Dick Smith’s parent company.

First is a membership-based subscription service offering free delivery, discounts and rewards in return for the annual fee. A Dick Smith spokesperson says customers are given plenty of warning to opt out of the service after they’ve signed up for a 14-day free trial.

But several irate customers told Consumer they only signed up to the trial to take advantage of a free delivery offer. However, they then struggled to cancel their membership and were charged the $149 annual fee. Since then, some have struggled to get a refund.

It starts with a purchase through Dick Smith 

Ana, one of the complainants, purchased silicone tape through Dick Smith on 19 July. Her order came to $18.30, with free delivery offered if she signed up for a 14-day First trial. 

"It just gets added automatically to your cart [and the box is] already ticked," Ana says. 

Shortly after her purchase, the Kapiti Coast resident received an email telling her the two-week First trial would begin. As soon as she read the email, Ana logged into her account and “unsubscribed from everything I could possibly unsubscribe from". 

Despite her efforts, Ana noticed a $149 charge to her credit card two weeks after her purchase. It was for a year-long membership to First, the subscription service she thought she'd unsubscribed from. 

She attempted to contact Dick Smith to request a refund but found the process "confusing ... leading you around in circles". After making several complaints, she was told a refund was on the way, but hasn’t yet seen it appear in her account. “I’ll believe it when I see the money,” she says. 

Likewise, Shelley purchased a small trampoline from Dick Smith as an addition to her home gym. Two weeks later, the Auckland resident noticed a $149 charge on her credit card statement for First. She didn't want it, wouldn't use it, and says getting in touch with Dick Smith to ask for a refund was “bloody impossible”. 

The same thing happened to Raewyn, who found a $25 treadmill clip she needed on Dick Smith’s website. Two weeks after purchasing it, she discovered a $149 charge on her credit card for the First scheme. 

Despite her best efforts, she is struggling to get a refund. "This First scheme is a rort. I would never want it because I would never buy enough of their goods," she says. "I would call it theft."

Commerce Commission investigates 60 complaints 

The Commerce Commission says it has received 60 complaints about New Zealand customers being charged the extra $149 fee for a First membership, including 47 in three days. 

“We are currently assessing the enquiries and considering our response,” says Kirsten Mannix, general manager of fair trading at the Commission. 

Businesses must not use fine print to hide important information, Mannix says, including additional costs or charges. 

“The practice of preselecting optional extra services during an online sales process can mislead consumers over the price of the product or service they are buying, and can cause them to purchase or agree to terms and conditions they did not intend to,” she says. 

Preselecting services may also be in breach of New Zealand’s Fair Trading Act.

Getting the money back 

On Kogan’s website, First's terms and conditions say customers are not entitled to a refund after the free trial period has ticked over into a paid membership. 

The website says, “If you cancel any time after signing up for a paid membership or converting from a free trial to a paid membership, you will not be refunded your membership fee regardless of whether you made any eligible purchases or have taken advantage of any Kogan First benefits.”

But a Dick Smith spokesperson says customers can cancel their membership after the trial period and receive a refund, minus the cost of any benefits received as a member. The spokesperson says customers receive several email reminders before the trial period ends, and that Dick Smith’s customer care team can be contacted through their account dashboard. “Our team is committed to providing the best possible service.” 

This wasn’t the experience of the people we spoke to. 

Consumer believes customers are being unwittingly enticed into using Dick Smith’s subscription service with an offer of free delivery when purchasing goods, then being charged $149 if they fail to cancel the service before the trial is over. As the service is pre-selected, this seems to be a breach of the Fair Trading Act. 

Anyone who has encountered similar issues should immediately contact Dick Smith and request a refund. If that doesn’t work, they can contact their bank and request a chargeback to their credit card, let us know, and lay a complaint with the Commerce Commission.