Ministry proposes e-consumer protection code

The Ministry of Consumer Affairs has come out with a proposed code for consumer protection in e-commerce.

The Ministry of Consumer Affairs has come out with a proposed code for consumer protection in e-commerce.

The model code is based on the existing OECD Guidelines for Consumer Protection in the Context of Electronic Commerce and the Australian Best Practice Model for Electronic Commerce.

It sets guidelines for Internet shopping sites in relation to fair business practice, truthful advertising and marketing, providing information about the identity and location of a business, providing information about the terms and conditions of contracts, implementing mechanisms for concluding contracts, establishing fair and effective procedures for handling complaints and resolving disputes, adopting privacy principles, providing information about payment, security and authentication mechanisms.

The ministry is proposing that online merchants adhering to the standards would be able to display a forgery-proof seal of approval. This would have to involve self regulatory mechanisms with operators who would ensure that businesses do adhere to the standards through audit and/or disciplinary procedures. Alternatively businesses could adhere to the code independently.

Last year the ministry joined international consumer agencies to assess Internet shopping sites to see how well they protected customer interests.

Of more than 700 sites visited worldwide, 25% provided no physical address, more than half failed to outline their payment security mechanisms, 62% provided no refund or exchange policies, 75% had no privacy policy, 78% failed to explain how to lodge a complaint, 90% failed to advise customers what laws applied to their transactions.

According to Minister of Consumer Affairs Philida Bunkle, 54 New Zealand sites were identified. Using a check list of 10 categories for satisfying consumer protection, only 12 of those sites met more than five of those requirements.

A discussion paper on the proposed code is available on the ministry Web site. Comments will be taken until the end of the month. The ministry will then confirm whether the model code is appropriate and workable, and suggest how to implement it.

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