E-commerce code of practice comes together

Initiatives to promote honesty among merchants and safety for consumers in e-commerce are coming to a head.

Initiatives to promote honesty among merchants and safety for consumers in e-commerce are coming to a head.

The Ministry of Consumer Affairs has published a final version of its "e-commerce model code", and a draft joint code of practice has been drawn up by the Direct Marketing Association and the Advertising Standards Authority. The latter code is scheduled to be completed by the end of November.

DMA chief executive Keith Norris says the DMA code “uses [the MCA] code as a base. It may not be the same wording, but it has the same goals and objectives.”

Ultimately, a seal of approval could be displayed on a Web site, testifying that a merchant abides by the code. “I think we will have such an accreditation scheme,” says Norris. “But the first priority is to get the code up and running.”

The DMA and the ministry propose establishing an E-marketing Standards Authority, to act as a channel for resolving complaints. A complaint, however, might actually be dealt with by the DMA, the ASA or the Commerce Commission among other bodies, dependent on its nature.

The DMA has decided to incorporate its electronic code within a more general code of practice for "distance and direct marketing". A proposal for a separate code brought a negative response from members, “who were disinclined to have yet another set of regulations,” says Norris.

Special provisions for digital media forbid unsolicited email, require a clear return address on emails, and require companies to be responsible in "managing their businesses to reduce unwanted marketing offers.

"When gathering data from individual consumers that could identify the consumer, and which will be linked with 'clickstream' data, marketers shall advise consumers [before collection] what information is being collected and how the information will be used,” the code says.

"Marketers shall also provide a meaningful opportunity for consumers to decline to have information that identifies them collected, or transferred for marketing purposes."

The MCA code makes stipulations that could require considerable change on some Web sites. It requires, for example, that a physical address be provided for the merchant. A survey conducted by the MCA last year found 25% of sites did not have such a contact address.

The conditions under which the customer enters a contract should be fully spelt out on the site, says the MCA code. This includes such details as up-front notification of all costs involved in the deal, and details of how to access complaint procedures.

On the privacy front, "businesses should provide consumers with clear and easily accessible information online about the way in which they retain and use personal information," says the MCA code. The provisions of the Privacy Act should be adhered to.

A number of local Web sites have no security or privacy statement, Norris notes.

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