Tuesday, 2 April 2013

Consumer Protection and the Internet



Buying goods or securing a service provider over the Internet is no longer taboo or overly risky.  The security protocols that protect our personal information are maturing with age and the Internet market place is moving from a pimpled teenager into a sophisticated adult. 

What about consumer protection? This too has moved from the haphazard and ad hoc to slick and professional (in terms of the remedies available on paper to a consumer). I will confine this discussion to three issues; fraud, Internet spam and returning of goods purchased electronically.

Fraud

Fraud is still a factor with online transactions, but a less problematic one. The Internet marketplace is competitive and dynamic.  As a result, most Internet companies will refund in cases of fraud where there is no negligence on the part of the consumer.  In South Africa, the likes of Takealot.com, Kalahari.net, Bidorbuy.com are relatively safe marketplaces taking their lead from the larger, more established Amazon.com, Play.com and Ebay.com.  Today, even the smaller Internet enterprises have advanced security procedures in place and will offer guarantees. The risk is present but is becoming minimal.

The South African definition of fraud is “the unlawful and intentional making of a misrepresentation which causes actual prejudice or which is potentially prejudicial to another.”  With criminal law, one must prove, beyond reasonable doubt, that all elements of the crime are present – in other words, strict compliance to the common law definitions.

Consider someone fraudulently obtaining credit card details and purchasing an airline ticket to the value of R10 000 ($1000).  The unlawful and intentional making of a misrepresentation is the fraudster using your credit card details to purchase an airline ticket.  The next part is the damage, which causes actual prejudice or which is potentially prejudicial to another.  A fraudster purchasing an airline ticket, without my consent or knowledge, is clearly prejudicial.   As a result, the fraudulent act satisfies the definition and the fraudster may suffer criminal penalties.

In addition, in terms of the Electronic Communications and Transactions Act 25 of 2002 (“ECT Act”), it is a criminal offence to, amongst others, tamper with electronic data and overcome security protocols. The penalties for fraudsters may be severe, however, the extent to which corporate entities report and follow up on fraudulent behavior remains in doubt. 

Personally, I have been purchasing goods and services on the Internet since 1998, well over a decade.  I have been the victim of fraud on three occasions, receiving full refunds and profuse apologies on each occasion.   The most recent of theses incidents was a few weeks ago – a fraudster purchased an airline ticket to Dubai on my credit card.  Within 48 hours the money was back in my account, two phone calls and one beurocratic form later and harmony had been restored.  Cheers Nedbank! Should I elect to do so, I have the ability to lodge a criminal complaint.

The point?  Buying on the Internet should be as normal as brushing your teeth by now.  As a result, the technologies and consumer service are advanced and accessible.   

Internet Spam

Wikipedia accurately defines Internet spam as the use of electronic messaging systems to send unsolicited bulk messages, especially advertising, indiscriminately.

If you have used the Internet in any meaningful way over the past decade you will have a fairly good idea about spam.  Essentially, it is a nuisance and is designed to trick and overwhelm consumers. In South Africa, in terms of section 45 of the ECT Act it is, under certain circumstances, a criminal offence to send unsolicited commercial communications to consumers. 
Moreover, the Consumer Protection Act No 68 of 2008 (“CPA”) prohibits marketers (annoying SMS messages, telephone calls etc.) contacting consumers at certain times, notably, public holidays and most weekend time. Additionally, the CPA creates an opt out mechanism which a consumer can enforce.

So, what can you do if bothered by spam?  Firstly, the Direct Marketing Association of SA (DMASA) operate a “do not contact” list which appears effective. In extreme circumstances, one may open a criminal case.  There are options available.

Returning goods purchased online

With the rapid convergence and development of technologies, the Internet marketplace has adopted a more modern, pragmatic approach.  Make no mistake, as with any part of society, it will contain elements that will attempt to deviate from the accepted norm, but for the most part, as with the situation on fraud, a solution-orientated approach appears to be the latest trend.

From a legal perspective, the ECT Act and CPA both provide substantial remedies to consumers electing to return goods or renage on agreements after a cooling off period.  It is difficult to give a “hard and fast rule” as so much is dependent on the nature of the product and circumstances of the return.  A general review of the CPA provisions can be found in an earlier article here.

Basically, a consumer has a “cooling-off” period, implied warranties and rights relating to representation of the product or service.  The consumer is a protected species in this regard and if you are having problems, a remedy is probably available so do not accept the proverbial run around.  Consumer protection is here globally, and here to stay.

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