Are the new dispute-resolution sites on your side?

NEW YORK Fri Feb 22, 2013 12:01pm EST

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NEW YORK (Reuters) - When Madison Mabin never received some shirts she had ordered online, she called and emailed the company's customer service department multiple times, but to no avail.

Since the 22-year-old Rockford, Michigan, resident was not getting anywhere on her own, she posted a complaint on a new dispute-resolution website called Scambook. The difference was immediate.

Scambook contacted her within a couple of days to get additional information and then informed the company of the complaint. Less than two weeks after that, she got her money back.

Scambook is one of a new wave of complaint-resolution websites that have taken root since 2011 and try to cash in on bad customer service. None of the sites, which also include Gripevine.com and PeopleClaim.com, would disclose how many users they have or how many businesses are participating, but all say they are seeing significant increases in traffic and usage.

"We have grown exponentially," says Scambook Marketing Director Kase Chong.

Direct dispute-resolution support for consumers has existed for a long time - from the business-supported Better Business Bureau, state and local consumer affairs offices and attorneys general, and even similar sites like PlanetFeedback, which has been around for more than a decade. But given the sheer numbers of customers complaining publicly on Facebook and Twitter, these avenues obviously have not been good enough.

Because complaints usually appear on social media without being reviewed, the surge in online dispute-resolution options makes sense to John Breyault, a consumer advocate and vice president of the National Consumers League. "It's to everyone's advantage to have yet another angle," he said.

COMPLAINT PROCEDURE

The first stop for an unhappy customer should be the company in question, says Breyault. If that fails, he says, the next-best step is to file a complaint with a consumer agency or the Better Business Bureau to see if that shakes something loose.

Consumers should use the new dispute-resolution sites in conjunction with these options, not instead of them, he suggests. After all, the websites each have hundreds of complaints that sit dormant until the company being complained about takes an interest. Some of them never get resolved at all.

PeopleClaim, which also fields disagreements involving roommates and landlords, says far more than half the complaints filed are resolved, and the percentage is higher if only consumer disputes are factored in. The other sites did not provide figures.

Most of the sites are free to use, but consumers should be aware of the possibility of minimal fees.

PeopleClaim does not charge users to file a complaint, but does assess an $8 fee to make the dispute public. If no resolution is reached in 90 days, PeopleClaim will refund the $8 and pull the complaint from the site. Between 43 percent and 45 percent of those filing complaints pay the $8, says founder Mark Deuitch.

Scambook is free to users, but sells a "reputation management" program to businesses for $99 to $499 a month. A complaint is only removed when the consumer approves it and the business tries to initiate a resolution. "We don't want to punish the business," Chong says. "We feel they're learning."

And Gripevine intends to make money from selling advertising and its dispute-resolution software to businesses.

Users should know whether a dispute site derives much of its revenue from the businesses being complained about, or whether it is designed with the consumer's interest at heart.

"It's still 'caveat emptor' when you're using these sites," Breyault says.

However, some businesses have had satisfactory experiences with the sites.

Oscar Amar, owner of Advantage Laser Center in Toronto, received an email from Scambook about an unhappy customer a couple of months ago. He says he worked with the website to interact with the woman and ended up offering her a full refund and getting the complaint removed.

"From a business point of view, it gives us an opportunity to show that we did this, we did that … then say, regardless, here's your money and it's resolved," Amar says. "It's not like other websites where people just rant."

He says Scambook offered him a reputation management package, but he declined it.

Mabin says she is glad she took a few minutes to reach out to Scambook, which she found in a Google search to see if anyone else had problems with that business.

"I had tried to contact this company five times prior and heard nothing," she says. "Within two weeks, I had accomplished what would have taken long over two months."

(Editing by Beth Pinsker and Lisa Von Ahn)

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