Consumers in Cyberspace

Transcription

1 Consumers in Cyberspace March 2001 Philippa Lawson Counsel, Public Interest Advocacy Centre

2 The Context Rapid growth in retail ecommerce still small minority purchasing online Key concerns: security privacy lack of information on vendor, products, t&c s lack of confidence in redress if problem arises

3 Ongoing Problems Security breaches Unauthorized use of personal information; inadequate privacy policies (CI study, 2001) Failure to deliver (16% - April 2000) Late delivery (24% - April 2000) Key contract terms not provided before sale (73%; CI Study, 1999)

4 Problems in Retail ECommerce anonymity lack of direct contact instant international presence opportunities for fraud/deception vulnerability of personal data vulnerability of electronic systems unreliable redress (esp. cross-border) cost shifting in electronic marketing

5 Responses Policy National Ecommerce strategies International (OECD) Guidelines Law Data Protection legislation Updating consumer protection laws Marketplace Seal programs; Online dispute resolution

6 Canadian Principles Information Disclosure Contract Formation Privacy Security Redress Liability Spam Consumer Awareness

7 Information Disclosure Consumers should be provided with clear and sufficient information to make an informed choice about whether and how to make a purchase. addresses lack of direct contact, anonymity

8 Information Disclosure on vendor, products, policies, contract terms plain language prominent or easily accessible timely disclosure capable of retention by consumer

9 Contract Formation Vendors should take reasonable steps to ensure that the consumer s agreement to contract is fully informed and intentional addresses potential for keystroke/clicking errors; unintentional contracting

10 Data Protection Protection of Personal Information Act individual knowledge and consent required for collection, use or disclosure of personal info. openness of company policy and practice security requirements individual access rights redress for complainants

11 Liability Consumers should be protected from liability and should be refunded payment (upon return) in transactions which were: unauthorized (inadequate authentication) uninformed (inadequate disclosure) incomplete (non-delivery or late delivery)) inadvertent (inadequate confirmation process)

12 Consumer Redress Consumers should have access to fair, timely, effective and affordable means for resolving problems with any transaction. in-house complaints handling 3P online dispute resolution clear, fair rules re: applicable law and forum, mutual enforcement of judgements

13 Limitations of Legal Redress consumers can sue BUT.. cross-border lawsuits raise issues: whose court has jurisdiction? whose laws apply? choice of law and choice of court clauses in consumer contracts are not necessarily enforceable

14 The Policy Context Stakeholders can t agree on appropriate forum in cross-border consumer disputes but DO agree on need to reduce unresolved complaints policy focus therefore on preventative mechanisms and alternative dispute resolution (ADR)

15 The Marketplace Context Vendor focus on customer satisfaction at all cost (money-back guarantees, etc.) promotion of fraud-protective payment mechanisms (VISA - no risk) 3P innovative uses of Internet to provide tools for dispute prevention and resolution

16 Services currently available Preventative: consumer information: complaints publicity business rating services reliability seals screening tools for shoppers escrow services

17 Pla ne tf e dbac k. com

18 Pla ne tf e dbac k- re port c ard

19 Bi zra te.c om

20 Ebay2

21 Services currently available Preventative: consumer information: complaints publicity business rating services reliability seals screening tools for shoppers escrow services

22 Logos

23 Services currently available Preventative: consumer information: complaints publicity business rating services reliability seals screening tools for shoppers escrow services

24 Bi zra te 2

25 W ebas sure d.c om

26 Services currently available Preventative: consumer information: complaints publicity business rating services reliability seals screening tools for shoppers escrow services

27 Ebay-e sc row

28 Services Currently Available Ex post facto: complaints assistance insurance usually via online marketplace or seal owner credit card chargebacks online dispute resolution facilitated negotiation; mediation, arbitration; automated negotiation/settlement

29 Pla ne tf e dbac k. com

30 Services Currently Available Ex post facto: complaints assistance insurance usually via online marketplace or seal owner credit card chargebacks online dispute resolution facilitated negotiation; mediation, arbitration; automated negotiation/settlement

31 Ebay.com

32 Ao l.c om

33 Services Currently Available Ex post facto: complaints assistance insurance usually via online marketplace or seal owner credit card chargebacks online dispute resolution facilitated negotiation; mediation, arbitration; automated negotiation/settlement

34 Types of ODR Complaints Assistance (BBB, OOO, WebTrader) Facilitated Negotiation (SquareTrade, NovaForum) Automated Settlement (Cybersettle, clicknsettle) Mediation (SquareTrade, NovaForum, eresolution) Non-binding Arbitration (Virtual Magistrate) Binding Arbitration (eresolution, BBBOnline)

35

36 Key Elements of ODR (1) Voluntary to consumers Independent and Impartial Transparent Fair (due process) Affordable

37 Key Elements of ODR (2) Effective: easy to find and to use timely results competent ODR officials binding on business; enforceable by consumers subject to neutral third party oversight ± scaleable: selects appropriate method of ODR ± coordinated with other similar services

38 ODR and Trustmark Programs Trustmark programs can enhance ODR by: vetting merchants in advance providing a Code of Practice (applicable law) offering incentives for compliance loss of trustmark adverse publicity offering complementary services compensation where merchant doesn t comply

39 CI Survey of ODR online research + literature review conducted May-August, criteria for inclusion: available online available to consumers in disputes with merchants over sales transactions available regardless of location of consumer and merchant

40 Results of Survey 30 providers; 36 distinct services few designed specifically for consumers most too costly +/or cumbersome few help re: uncooperative merchants most are English-only many have limited applicability none met all criteria for effective ODR

41 CI Recommendations need international standards for B2C ODR need 3P oversight (compliance assessment) ODR should not be mandatory or prerequisite to legal redress in home courts ODR should not be binding on consumers ODR services and trustmark owners should provide more information on case results

42 Lessons to date Services must be easily accessible and widely known in order to be used the more convenient, the more effective complementary services should be linked linkages benefit both linked parties (eg: ebay + SquareTrade; mediation + arbitration services) the more comprehensive, the more effective especially re: consumer information

43 The Future? Market shakedown likely survival of the most convenient and effective? need high profile (direct or indirect) many innovative services unlikely to flourish too many options; too dispersed brand name redress services likely to develop, in association with online marketplaces and/or business subscribers

44 The Future - con d mix of domestic legislation (privacy, liability), international conventions (jurisdiction, crossborder enforcement) and private sector initiative (trustmarks, redress) international standards? oversight?