Auctionworld goes under the hammer

GOING, going, almost gone! Complaint-ridden TV shopping channel Auctionworld has been hit with a record £450,000 fine by broadcasting watchdog Ofcom. It has been condemned for breaking more rules than all the other British TV channels put together. And its owners have been handed a near-impossible list of conditions to meet - or the regulator will pull the plug.

The company, which broadcasts on a Sky satellite channel, invites viewers to call a premium rate number and bid for goods shown. But thousands of viewers say their credit cards were charged for goods that did not arrive and they have had to fight for refunds. Others claim the 'guide prices' shown on Auctionworld programmes are pie-in-the-sky, with products worth a fraction of the suggested value.

Financial Mail sounded the alarm over Auctionworld in a series of articles going back twoanda-half years.

A few days ago, an official Ofcom report found the company guilty of a string of offences ranging from 'misleading and inaccurate' prices to 'severely inadequate failures' in delivering goods and sorting out problems.

In one case, Ofcom investigators found that Auctionworld had sold jewellery with a £14,000 price tag, but the unlucky buyer discovered it was worth only £500. And loose diamonds said to be worth £19,360 were examined by Ofcom's own expert who ruled they were worth only £3,580.

Auctionworld has now been ordered to remove all price tags from sales involving diamonds, diamond jewellery and even watches containing diamonds unless the company first has them valued by an Ofcom expert.

The regulator has also ordered the channel to broadcast a statement three times a day for three weeks, admitting that it has been found guilty of misleading its customers. And the Hertfordshirebased firm must now reply within ten days to every customer complaint submitted via Ofcom or be stripped of its licence to broadcast.

And it is not just the items Auctionworld has been selling that have made the headlines. Presenter Liz Fuller famously dumped her TV celebrity boyfriend Paul McKenna live on air.

The former model sent a text message to the TV hypnotist to tell him to watch the show. When he tuned in she was involved in an auction for engagement rings and turned to camera and said: 'Going, going, gone - like you, Paul'.

Auctionworld has been a problem for TV regulators almost since the day it

Auction TV channel goes off the air as watchdog fines it a record £450,000 - two years after Financial Mail first raised the alarm over pie-in-the-sky prices and jewellery that fails to arrive

began transmitting in 2001. It has breached TV codes of conduct on at least seven occasions, and in 2003 it was fined £10,000 by Ofcom's predecessor, the Independent Television Commission.

The company is run by George Spitaliotis, a 35-year-old businessman who lives in a £1m mansion at Goffs Oak, Hertfordshire, and drives a Range Rover complete with personalised number plate. But Spitaliotis shocked Ofcom by revealing that he recently handed over control of the company to Californian millionaire Grant Lin, who is now managing director.

Lin failed to turn up for Ofcom's hearings and Ofcom was scathing in its description of information supplied by Spitaliotis and Auctionworld's lawyer Nigel Rowley, who is also part owner of the business and sat on its board until three months ago.

The pair were 'unhelpful' and 'appeared to disregard the consequences' both of breaking broadcasting regulations and mistreating their customers.

Auctionworld, which employs about 300 people, but has never made a profit, has hit back at the watchdog, saying only a small fraction of its customers complained. But it admits the level of complaints is 'unfortunate, regrettable and undesirable'.

The company blames the late arrival of goods from suppliers, causing its customer services department to become swamped. This has been corrected, it claims, adding: 'Our suppliers have worked closely with us to resolve the problems.'

But one supplier who has been fighting for thousands of pounds owed by Auctionworld told Financial Mail: 'They always blame computer failures and teething troubles, but they have been in business for three years, not three weeks. I will never deal with them again.'

And one of the thousands of customers who complained called on Ofcom to withdraw Auctionworld's broadcasting licence at once.

Sue Hammond, a school secretary from Putney, south-west London, paid about £28 for jewellery, only for Auctionworld to refuse to deliver it, saying there was 'a quality control problem'. This was a lie, and the same jewellery was later offered again, but at a higher price.

Sue said: 'There is no way I would advise anyone to buy anything from Auctionworld. They should not be trading.'

As Financial Mail went to press, Auctionworld had vanished from TV screens. A message from the company blamed 'technical difficulties'.