Fair Trading takes Penta to court as company battles potentially fake reviews

ON web forums, IT retailer Penta is infamous for failing to deliver to customers such as this man. Now it's facing court action.

IF you believe the Penta Group, a few haters want to bring it down. If you don't, then this IT equipment retailer has a serious customer-service problem.

Sydney-based Penta, which mainly sells via the internet, has been rated 271 times at productreview.com.au, of which 256 are the lowest possible - "terrible".

Penta managing director Wahid Rahman said up to 150 of these were posted by one person who had bought from his business "once or twice ... two or three years ago".

Penta was being targeted by at least 10 people who were posting fake negative reviews, Mr Rahman said, adding that NSW Fair Trading had on Tuesday invited him to supply names so it could write to the reviewers to tell them to stop.

"If they do not respect the letter we can take legal action," Mr Rahman said. "I have to sort out who are our enemies."

Fake online reviews are a growing problem. The ACCC and state consumer affairs authorities have a project underway aimed at stamping it out. And among all those rotten ratings against Penta there may be dodgy ones. But not all of its customer-service shortcomings are a fiction. Earlier this year only two traders were generating more complaints to NSW Fair Trading.

Since mid 2012, Fair Trading has been trying to get Penta to lift its game. I can reveal that after no noticeable improvement, Fair Trading began proceedings in Parramatta Local Court last month, alleging Penta has failed to provide customers with goods in a "reasonable time" - a breach of the Australian Consumer Law and NSW Fair Trading Act, if proven.

As for Fair Trading offering to help Penta battle made-up reviews, well, that wasn't quite right, according to Fair Trading. There was no such offer, it said.

Mr Rahman had called its barrister on Tuesday after receiving the brief of evidence. He was told to get his own legal advice and that he should write to the supposedly fake reviewers.

When this was put to Mr Rahman he remained adamant the offer was made.

And Penta would defend Fair Trading's court action. "We are doing nothing wrong," he said.

Delivery delays were the result of suppliers running out of stock.

Retailers such as Penta use what is called a "drop ship" model, said PwC digital leader John Riccio. It means they don't hold all the goods they sell in a warehouse. They place an order with a supplier after receiving payment from a customer.

Mr Riccio said it works well for consumers - wider variety and lower prices - provided customers know whether delivery will take three days or 16.

"It's when you have an expectation that it will be three days and it takes 16 that you get upset consumers," Mr Riccio said.

The court action against Penta Group came to light in our pursuit of a refund for reader Simon Munslow, a Canberra solicitor who as a student worked on a consumer affairs TV show.

On July 3 Mr Munslow paid Penta $574 for a scanner. It was supposed to be delivered within three days.

It hadn't arrived by July 8 so Mr Munslow rang Penta. The scanner would be on his doorstep by July 12, he was told.

On July 15, and still without a scanner, he rang NSW Fair Trading. It gave him a different contact number for Penta but there was no answer. He left a message.

The next day Penta rang to say his scanner wasn't available. But a more expensive model was. He asked for a refund. He was told he'd get his money back within three days.

He'd heard that before so he contacted us.

"There is a certain type of company that only responds to negative publicity," Mr Munslow said.

Penta's Mr Rahman told Public Defender it processed a refund on Monday. Initially he said this did not have anything to do with our inquiries.

"As soon as the guy called it was done," Mr Rahman said. Later he said he couldn't be sure that it had nothing to do with our inquiries.

Mr Rahman said that of its 30 to 40 daily orders, with "one or two" the supplier runs out of stock.

"One to two customers every day gets upset," Mr Rahman said.

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