Building Trust Consumer Dispute Resolution B 2 C

Building Trust: Consumer Dispute Resolution (B 2 C) Louise Sylvan Consumers International

Consumers International l Global federation of 263 independent consumer organisations in 119 countries l Eg. Developed countries: Brand names – – – Consumer Reports (US) Consumentengids (Netherlands) Tests-Achats (Belgium) Which? (UK) CHOICE (Australia) ……

… do we have confidence? 65% use a PC 43% use the Net 5% transact

KEY CONFIDENCE ISSUES l Novel Shopping – New requirements, new fraud opportunities l Privacy l Security l Authentication l Redress

Redress l Consumers International study on providers of ADR online – released today – Follows on from consumers@shopping – 8 key criteria for assessment of providers – Major deficiencies/areas for improvement – Conclusions and Recommendations

Online ADR Providers l l l l 1 -2 -3 Settle. com All. Settle. com BBB Online click. Nsettle. com Cybercourt Cybersettle E-Mediator e. Resolution i. Courthouse i. Level Internet Neutral Internet Ombudsman Mars New. Court. City. com Nova. Forum. com l l l l ODR. NL Online Resolution Online Ombuds Office On. Line Disputes Resolution Forum Settle. Online Settle. Smart Square. Trade The Virtual Magistrate U. S. Settle Web. Assured. com Web Dispute Resolutions WEBdispute. com Webmediate Web Trader

What makes for a good dispute resolution process? l Lots of experience offline in ADR – Needs co-operation between parties – Can be complaints assistance, mediation, arbitration l Online adds additional dimensions – Some efficiency (eg. Geographically) – Some innovation (automatic)

What makes for a good dispute resolution process? l First, the firm has a good complaints handling, money-back guarantees, etc l ADR comes after the firm and the consumer can’t agree

What makes for effective dispute resolution? l 8 key principles – Based on EU and TACD; GBDe l 1. Independence/Impartiality – Of the provider – Of the officials handling disputes l Raises issues of: – Consumer representation, balance – Funding by business

What makes for effective dispute resolution? l 2. Transparency – Up front disclosure of process and procedures – Publication of general statistics – Publication of arbitration results – critical

What makes for effective dispute resolution? l 3. Availability – Geographically – Range of languages l 4. Affordability – Preferably free to consumer, or very low fees

What makes for effective dispute resolution? l 5. Effectiveness – Visibility, easy to find – Timeliness – Competence of officers – Ease of use – Enforceable – arbitration binding on the business – Subject to oversight

What makes for effective dispute resolution? l 6. Fair: Due Process – Both parties heard – No need for (prohibition of) legal representation l 7. Legality/Liberty – Voluntary – Does not limit rights nor displace law enforcement actions – Decisions binding on trader not consumer

What makes for effective dispute resolution? l 8. Oversight (third party) – Problem of inherent bias towards the paying party – most schemes, it’s business paying – No market forces operating in terms of consumer choice – choice of ADR by business – Standards established and adhered to through audited third party process not self declaration

Results - Consumers International Initial Study of ADR-online l Overview assessments of online ADR providers – no grading this time l 30 providers l 25 North American, 5 European l offering 36 distinct services – Few designed specifically for consumers l 23 for profit companies

Results - Consumers International Initial Study of ADR-online l None met all criteria l Generally well described procedures l Too little attention to language - English l Few assisted with unco-operative merchants l None of the business providers balanced their governance structures – consumer and business representation

Results - Consumers International Initial Study of ADR-online l Many limited their applicability l Most were disproportionately costly l Few reported well or transparently l Most were visible (easy to find), timely and easy to use

Conclusions & Recommendations l Good online ADR should help reduce likelihood of needing court system l Doesn’t solve applicable law or forum l ADR suffering same problem as plethora of seal programs – too messy, too unsupervised for consumer trust to build, most still not meeting essential standards

Conclusions & Recommendations Too little consideration of type offered – eg. inappropriateness of mediation for many B 2 C disputes; more thought for consumer designed services l Serious enforcement problems – “No Teeth” l – should probably be linked to government ADR or trustmark with promise of compensation or money back – Trustmark at least provides minimum Code of Practice and a sanction (dismissal)

Conclusions & Recommendations l Catering for non-English speakers essential l Costs can’t be higher than most B 2 C disputes l Consideration of balanced governance needed - credibility l Better transparency and reporting – not business “protection” services

Conclusions & Recommendations l Inappropriate “mandatory” ADR and “binding” clauses need to be eliminated l Global standards needed l Ongoing independent oversight needed for trust to build