Virtual of the Real: Consumer Rights in E-Commerce

  • To: s-asia-it at apnic dot net
  • Subject: Virtual of the Real: Consumer Rights in E-Commerce
  • From: Zubair Faisal Abbasi <zfabbasi at yahoo dot com>
  • Date: Tue, 19 Dec 2000 02:51:05 -0800 (PST)
  • Reply-to: zubair@isb.sdnpk.org
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    • Virtual of the Real: Consumer Rights in E-Commerce
      
       By Zubair Faisal Abbasi (dated: 6 December, 2000)
      
      In the selectively experienced and info-glutted yet
      notional cyber-space, the episode of techno-drama related
      to e-commerce is replete with high-tech success stories on
      the one hand and a phenomenal growth of high-capitalization
      potential of dot-coms on the other. Some sobering thoughts
      about the dot-com bubble-bursting are reaching the inboxes
      of netizens but more of the info-bytes speak about the
      dot-coms' spread bringing more business for advertising
      agencies; essentially adding to the expanding spectrum of
      advertising and resultantly emerging more dot-coms related
      IT initiatives. Not-so-surprisingly, a news item says,
      "Indian Information Technology start-ups' extravagant media
      spending helped the domestic advertising industry grow
      24.83 per cent in the year to March, according to a survey
      by A&M, an industry publication." Keeping in mind the
      volume of the money got through reshuffling of budgets and
      without generating a new, the report says with a warning,
      "Advertising agencies' total gross income was Rs10.25bn
      ($218.5m) last year. But some industry players warn that
      the slump in dotcoms' fortunes, coupled with forecasts of
      slower overall economic activity, could slash the sector's
      rate of growth to about 10-12 per cent in the year ahead."
      http://tm0.com/sbct.cgi?s=59315074&i=281025&d=670509.
      
      "E-Commerce has a lot of hype surrounding it", says Louise
      Sylvan Vice-President, the Consumers International, "and I
      think a lot of the hype is deserved. E-commerce has
      enormous potential to provide consumers with better
      information and educational opportunities, as well as new
      market choices and value for money." 
      
      Sofar, so good. But how can the potentials of e-commerce in
      the Information Age be harnessed in the best possible way
      amid a sharp 'digital divide' around the world without
      upholding consumer rights related to the appropriation of
      IT infrastructure (be it hardware or software)? How can the
      electronic commerce mechanisms be primarily geared to
      develop win-win situations both for business community and
      consumers leading to a system that actively seeks healthy
      business practices and consumer satisfaction for mutual
      benefit and trust? 
      
      >From the consumers' perspective, the issues resonating the
      cyberspace would be: Are the relevant consumer rights
      (i.e., privacy, redress, information etc.,) chosen from the
      eight rights adopted by the Consumers International (i.e.,
      right to basic needs, safety, information, choice,
      representation, redress, consumer education, and healthy
      environment; some of which are won in many cases after
      struggles in the 'real world') being taken into cognizance
      in the cyberworld? More specifically, does the virtual
      'shopping mall' offer the much cherished "just looking" and
      "window shopping" opportunities without disclosing the
      shoppers identity to the merchants and how the information
      obtained from the consumers through cookies and other means
      is used without their prior knowledge? Apart from it, how
      do the general business practices and different behaviors
      in e-commerce influence redress, refund, and cancellation
      of contract from the consumers' perspective? 
      
      These questions are important because, it would not be an
      exaggeration to say that e-commerce is at the moment a
      sub-set of the cyberworld but it is fast extending its
      shadow to dominate the space with its ubiquitous presence
      as embedded "click here" adds in headers and footers of
      emails and flickering e-banners on almost every website. 
      
      Notwithstandingly, the euphoric feelings attached with
      e-commerce are as shaking as accidentally finding the
      Aladdin's Lamp and getting into an absolutely new world
      with slight rubbing of the lamp and quite parallel to this
      is a whole range of choices before different countries to
      tackle with e-trade and e-commerce related issues. These
      choices range from self-regulatory strategies (e.g,
      Australia) for business to setting up regulatory bodies and
      treating e-commerce as global concern to develop an
      equitable global legal, penal, redress system, and bodies
      to address consumer concerns. However, e-commerce taken as
      a global concern requiring global initiatives from nation
      states with consumer protection perspective is an aspect
      that needs urgent attention but coherent and cautious
      approach.
      
      Consumer concerns in e-commerce are one of the many points,
      which ask us to critically analyze the often e-marketing
      oriented cybervision with an ever-expanding access of
      advertisements to consumers. For this purpose, let us go
      through the itemized flashes of a special study conducted
      by the Consumers' International. The study not only
      enlightens us but also provides food for thought to think
      across the glitzy world of e-commerce with consumers'
      perspective.
      
      For this study, the Consumers International, took the
      initiative in late 1998 and early 1999 to find out what is
      happening now in the 24 hours awaking virtual world of
      electronic commerce - what consumers are being promised in
      terms of information disclosure, returns policy and
      security of transactions, and rights to privacy. 12
      consumer organizations around the world took part in a
      project of "mystery shopping" over the Internet. The
      project team ordered more than 151 items from 17
      countries/territories and returned most of them. 
      
      THE STUDY FOUND
      
      -	One in 10 items never arrived.
      -	Two buyers, from the United Kingdom and Hong Kong have
      waited over five months for refunds.
      -	Almost half - 44% of the products ordered arrived without
      receipts.
      -	73% of traders failed to give crucial contract terms.
      -	Over 25% gave no address or telephone number.
      -	24% were unclear about the total cost of the item that
      was ordered.
      Information Disclosure:
      
      Some web sites visited did not provide adequate information
      when it came to terms and conditions of making a purchase: 
      
      -	For 40% of sites information on terms and conditions
      governing the purchase were absent.
      -	In 29% of cases consumers had to actively search for the
      conditions in order to locate them. 
      -	Only 27% of cases provided that information before the
      purchase was finalized. 
      
      Some information on web sites was confusing, making it
      difficult to distinguish general product information from
      terms and conditions, or distinguishing subjective
      advertising claims from objective empirically based
      research information; whereas in the real world, such a
      distinction would be relatively easier to make. 
      Security of Transaction:
      As for security of transactions: 
      -	61% of sites from which goods were purchased claimed they
      were 'secure' sites; 
      -	44% of that total supplied additional information on the
      type of security system provided. Some sites claimed that
      they provided a SET payment option, but they actually did
      not. ("Secured Electronic Transactions" - SET whereby
      additional security could be offered to consumers). 
      
      Generally, banks claim that consumers will not be liable
      for any "proved" credit card fraud. Moreover, some sites
      indicated that they would reimburse consumers the US$50
      that could be charged in the event of credit card fraud.
      However, it is still unclear whether the charge-back policy
      of card issuers and the legal protection offered on
      consumer liabilities will cover fraudulent transactions on
      the Internet in many countries.
      Returns Policy
      Information on a site's returns policy was also a problem: 
      -	Only 24% of the study participants found that a returns
      policy was included in the transaction.
      -	67% of cases specified restrictions. 
      -	21% of the CI study participants experienced a problem
      with the refund. 
      -	In one case, a site claimed goods could be returned, but
      when tested on this, the request for return went
      unanswered. Some companies even charged a restocking fee
      for any item returned. 
      
      Privacy Policy:
      
      Few sites, locally or overseas, mentioned anything about
      having a privacy policy. 
      For example, whether shoppers could prevent having their
      names placed on a site's mailing list or from having their
      details passed on to other retailers. Only 25% of US sites,
      for example, had a simple tick box for placing names on a
      mailing list, while overall only 17% of the total sites
      surveyed provided that option. 
      Some sites actually encouraged the disclosure of personal
      information by offering discounts for filling out surveys
      or gathering information in the guise of post-purchase
      satisfaction surveys.
      
      Many sites did not provide information about such matters
      as delivery policy and handling costs in advance, but only
      provided the information until after consumers had
      submitted their personal information, such as credit card
      number, email address and mailing address. 
      In one case, it was only after the order had been
      submitted, including the release of credit card
      information, that it was found the company did not ship the
      product to the purchasers' country.
      
      So Go Ahead and Keep Consumer Rights In Mind!
      
      Taking consumer confidence as critical to the success of
      electronic commerce, one may argue that without at least
      the level of protection in the virtual marketplace as we
      currently have in the real marketplace, it will be
      difficult to achieve the win/win outcome that is necessary
      to realize the full potential of electronic commerce. It
      should be noted that various "click on" type contracts used
      in websites today are often one-sided measures that
      unfairly limit consumer rights in a wide range of areas.
      These not only infringe on privacy but related areas such
      as the rights to benefit from exceptions and limitations of
      copyright, the right to criticize products, the right to
      offer competing products, the right to seek redress for
      defective products or service, and many other important
      consumer rights. Policy makers should be wary of measures
      that permit sellers to enforce unreasonable contract terms.
      And what else should be done, .. let us explore!
      
      
      8*****8
      Web sites:
      
      Consumers International:
      Http://www.consumersinternational.org 
      TheNetwork for Consumer Protection in Pakistan:
      http://www.thenetwork.sdnpk.org 
      
      
      
      =====
      Regards,
      Zubair Faisal Abbasi.
      http://pakdev.tripod.com
      Islamabad-Pakistan
      
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