Study: Sites rate poorly on consumer disclosures

The Federal Trade Commission finds that the disclosures and guarantees online sellers or firms are offering consumers are not up to snuff.

2 min read
The Federal Trade Commission today kicked off a two-day workshop to determine whether online users are getting their money's worth.

In conjunction with the workshop, dubbed the Global Electronic Market Place, FTC staff reviewed 200 Web sites from 18 countries--half of which are from the United States--to sample the quality of disclosures and guarantees online sellers or firms are offering.

The study found that although a majority of companies provided contact information, only 26 percent posted their return policy and just 9 percent listed their cancellation terms. In contrast, 90 percent of the companies provided an email address and 84 percent gave a street address.

The sites studied by the FTC were arbitrarily selected from a sampling of 2,000 Web addresses provided by Dun & Bradstreet.

The results aren't strong enough, the FTC says. But the big question is how to handle consumer complaints in a global environment where consumers may not even know where a Net company is located. Only 29 percent of the U.S. Web sites studied stated their country vs. 79 percent of non-U.S. companies, according to the study.

"What if the products don't arrive, or the wrong product is delivered, or somehow the advertising, marketing, or sale by the seller is inconsistent with the laws of the consumer's country?" FTC chairman Robert Pitofsky said in a statement. "Does the consumer have to bring an action in the foreign country if the product or service never arrives or is not what was ordered?"

The FTC will hear presentations from Net firms, consumer advocates, and government representatives from around the globe about how best to protect online surfers. The agency is not expected to make sweeping recommendations, but past Net privacy workshops have led the agency to call for new laws to protect children's personal information, for example.

Still, U.S. regulators' interest in online consumer protection is clear.

"If people do not feel safe and secure with e-commerce, they won't use the Internet and all of those rosy predictions on Internet use won't happen," secretary of Commerce William Daley said in a statement. "Industry and consumer groups have to work together to set the floor on consumer protection so that consumers gain the same confidence in cyberspace as they have on Main Street. "