Monday, 29 September 2014

Digital economy: Commerce across borders needs robust redress

Liz Coll, a digital policy expert at the consumer futures unit, Citizens Advice, looks at how consumers can get a better deal from cross-border commerce.

How can consumers buying products from foreign markets be confident of refunds, delivery and redress if things go wrong?

Even in the single market of the European Union, consumers remain far less confident about buying online from sellers in other EU countries as opposed to domestically.

This then impacts on trade, with EU domestic e-commerce growing at over twice the rate of cross-border e-commerce.

As well as issues with delivery and payment, confusion over what protections apply and how to resolve problems if they arise can put consumers off buying online across borders. Research from a Consumers International Global Consumer protection survey  found that consumers do not always have access to get a simple, fair and quick redress when purchasing online and there are likely to be more problems when buying from a different jurisdiction.

Given the increase in global connectivity and e-commerce (predicted to top $1.2trillion by the end of 2014) this raises the question of how consumer rights to redress might be realised in a digital world?

Let’s look first at what we might call the traditional route of legislation, regulation and information.
  • Consumers International wants to  update the UN Guidelines on Consumer Protection to ensure that simple, effective redress is available for consumers living in the digital age.
  • Agencies, such as the EU, are proposing harmonising returns policy provision in all states and new legislation on online dispute resolution.
  • Accreditation and endorsements might also help to continue building consumer confidence.   
But are there other things that could develop trust in cross border transactions
help prevent disputes arising and uphold consumer rights? The protection mechanisms outlined above could be strengthened by powerful, consumer-centric tools, for example:
  • Online dispute resolution: the most famous example is Modria a dispute resolution platform which handles more than 60 million disputes per year, taking participants through a process of stages, suggesting solutions and recording information and if necessary facilitating mediation or arbitration.
  • Reputation metrics. the social, interactive web enables consumers to rate sellers’ performance and quality and, when aggregated with other users’ feedback, creates ‘peer-produced metrics of trust’. Systems and mechanisms that can ensure impartiality and reliability become more important. Reevoo and Feefo are examples of platforms that authenticate and aggregate reviews with the goal of making them trustworthy, representative and structured.    
  • Other 'go-between' intermediary services such as payment services or the emerging market for personal data intermediaries, who set and manage data sharing permissions on consumers’ behalf, will also have a role to play in engendering trust and creating an infrastructure in which the rights to security and safety can be realised. 
Many of these mechanisms are made possible by widespread use of social, digital technology.

Working out how to maintain impartiality and accountability, and how to increase use and confidence in the system, will be necessary to ensure they can benefit everyone.  

In conclusion, effective cross border redress is a crucial element in creating an environment for consumers in which they can confidently engage in e-commerce across borders.

However to be truly effective, it must be part of a wider, concerted effort to empower consumers to realise their hard-won consumer rights in the digital age

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