US firm 'used UK web address to trick buyers'

US authorities are taking legal action against a California-based company for allegedly tricking hundreds of UK consumers into thinking it was based in this country.

The company, Balls of Kryptonite, sold electronic goods to people in the UK through the websites bestpricebrands.co.uk and bitesizedeals.co.uk.

The Federal Trade Commission claims the company's use of UK domain names made customers believe they were dealing with a British-based company, meaning they were protected by UK trading regulations and warranties.

But when people received the cameras, video games and other electronic goods they had bought, they found that they had been charged unexpected import duties, had invalid warranties and would be charged draconian cancellation and refund fees if they wanted to send the goods back.

In some cases the electronic items purchased were different to those described on the website and could not even be used.

The Federal Trade Commission has taken the company to court, in the first ever case brought against a US company that did all of its trading abroad.

The Commission worked with the Office of Fair Trading (OFT), which had received complaints from consumers who had bought items from the company.

Mike Haley, OFT director of consumer protection, said: "It is important that companies give consumers clear information, including upmost transparency about where they are based to ensure informed purchases online.

"Prompted by complaints from UK consumers, this landmark legal action shows how international authorities are working closely and we will continue to share intelligence and take action where consumers are potentially misled.

"However it is also vitally important that when buying goods or services online, consumers also take time to investigate the company, check for feedback and contact information and how to get in touch with a company. If things go wrong consumers should contact Consumer Direct on 08454 04 05 06."

There is a growing problem with foreign companies using UK domain names to make it appear that they are based in this country.

Earlier this month Trading Standards warned consumers not to assume a company was UK-based just because it had a UK domain name.

It has been estimated that as many as 480,000 websites with the co.uk suffix may not be based in the UK, with the majority of these sites thought to belong to firms based in China.

Anyone can obtain a website with a UK domain name simply by registering with their name and address and paying £5.

A spokesman for Nominet, which gives out UK domain names, said: "If consumers are unsure about the origins of a website, the advice is to use the Nominet 'Whois' tool on www.nominet.org.uk ."