06 August 2010

E-Consumer Protection Consultation

The UK's Office of Fair Trading (OFT) promotes and protects consumers' interests by ensuring markets work well, and that businesses act fairly and competitively. The government has asked the OFT to develop a longer term national strategy for consumer protection and enforcement on the internet. The strategy is intended to promote a safe and vibrant internet market.

Photograph of a tag label lying on the ground - it has the word 'SECURITY' written on it

As part of this strategy development, the OFT has launched a consultation on E-consumer Protection. The objectives are to improve the effectiveness of online markets and increase the level of consumer trust, so that consumers have a real option to use the internet for transactions, as equally as any other channel. The aim is also to ensure that enforcement of consumer protection online is as good as anywhere else in the world.

The main consultation document outlines some useful statistics about the UK internet economy using data from the European Commission's Consumer Markets Scoreboard 2010, the OECD and the OFT's Attitudes to Online Markets (publication due shortly). For example, 71% of the UK's retailers use e-commerce/internet sales channel for retail, and internet/online accounted for 9.5% of UK retail trade (£38 billion) in 2009. Apparently UK consumers have a high level of trust in UK sellers/providers' protection of their consumer rights and that they are adequately protected. However, it is not all good news as almost 20% of UK internet users are not transacting online, with a third of these stating concerns about the security of their personal and financial information as the reason. Overall, two-thirds of all internet users are worried about unauthorised access to their personal information. There are also concerns about being conned by companies online. The consultation document outlines how consumers may be becoming complacent about security but that they lack awareness of issues such as mis-use of cookies and behavioural advertising.

The OFT suggests these problems reduce confidence, lead to lower levels of demand, and consequently lower levels of supply. Households can miss out on potential savings and this is especially problematic for low income households (LIH). The consultation document proposes that agencies should work together to empower consumers, promote business compliance and develop effective enforcement. It proposes a number of high-level actions under the themes of consumer education, tool provision and hardening, business information, cooperation and deterrence, and enforcement capability building, coordination and leveraging intelligence.

The outcome of this consultation will have a large impact on organisations in the business-to-consumer (B2C) sector (there is also some discussion of whether C2C should also be addressed). If you are an online retailer, perhaps get in touch with your trade organisation and ask them whether they are responding, or do so yourself.

There are five general response questions, and further more-detailed questions about the high-level actions and monitoring proposed. Responses can be submitted online, by email and by post. The consultation period closes on 13th October 2010.

Posted on: 06 August 2010 at 09:02 hrs

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