Building Trust in the Online Environment: Business to Consumer

Dispute ResolutionJoint OECD, HCOPIL, ICC Conference

The Hague, 11-12 December 2000

Session III: Dispute Resolution at the earliest Session III: Dispute Resolution at the earliest Stage - internal complaints handling and Stage - internal complaints handling and

customer refundscustomer refunds

Presentation by Alastair Tempest,

Director General,

Federation of European Direct Marketing

Trust and ConfidenceTrust and Confidence

FEDMA with the “Ring of confidence” aims to establish a comprehensive self regulatory system for electronic commerce.

The Ring of Confidence includes :• a Code of Conduct on E-commerce and interactive Marketing

• a related consumer complaint resolution mechanism

• links to online Alternative Dispute Resolution (ADR) Systems.FEDERATION OF EUROPEAN FEDERATION OF EUROPEAN

DIRECT MARKETINGDIRECT MARKETING

… … A new reality ?A new reality ?

Why is it important Why is it important to act to act

now ?now ?

e-Companiese-Companies (Yahoo.com)(Yahoo.com)

– Beginning of 95Beginning of 95 25 25 – February 96February 96 7 020 7 020– May 96May 96 68 776 68 776– October 96October 96 134 415 134 415 – April 97April 97 191 028 191 028

– September 97September 97 285 628 285 628 – March 98March 98 313 163 313 163 – October 98October 98 386 389386 389– February 99February 99 434 718434 718– October 99October 99 498 604 498 604

Source: Yahoo.com

e-Userse-Users (Nua, 1999)(Nua, 1999)

Source: NUA, 1999

Source: ActiMedia

4

Common Problems for “e-Common Problems for “e-merchants”merchants”

• Lack of confidence for financial transactions on-line

• Concerns about the unrestricted or hidden collection of personal data

• Non-delivery/late delivery of goods

• Hidden costs (especially postal charges and taxes)

• No clear guide to the sellers’ rules and procedures

Therefore consumers lack trust and Therefore consumers lack trust and confidence in the webconfidence in the web

Purchased products on-line in Europe Purchased products on-line in Europe suffer from “serious problems of delivery”suffer from “serious problems of delivery”

AAAnnndddeeerrrssseeennn CCCooonnnsssuuullltttiiinnnggg RRReeepppooorrrttt eeeFFFuuulllfffiiilllmmmeeennnttt iiinnn EEEuuurrrooopppeee

NNNooovvveeemmmbbbeeerrr 222000000000

GeographyUUKKGGeerrmmaannyySSppaaiinnSSwweeddeennFFrraanncceeIIttaallyy

Market Units

SSuuppppllyy CChhaaiinnRReettaaiill,,ddoott..ccoommPPMMPP,,EE&&HHTT

Company Type

LLeeaaddiinngg ee--ttaaiilleerrUUppssttaarrtt ee--ttaaiilleerrRReettaaiilleerrCCaattaalloogguuee

Source: Andersen Consulting-2000

Objective:Objective: To measure the ability of European dot.com companies to capture and fulfil To measure the ability of European dot.com companies to capture and fulfil orders, process payments and refunds, and handle returnsorders, process payments and refunds, and handle returns

Results:Results: 510 total orders ; 445 survey responses510 total orders ; 445 survey responses

Of the 445 returned surveys:Of the 445 returned surveys:

272 orders were submitted successfully and were delivered to the customer within the 4 week deadline

173 of the orders (38.9%) failed

The 173 failed orders are categorised as:The 173 failed orders are categorised as:

Orders which were not completed (51.4%) and failed due to technical or procedural problems

Orders which have been placed but did not arrive within 4 weeks (48.6%)

Source: Andersen Consulting-2000

e-Commerce is not English-Commercee-Commerce is not English-Commerce Multilingual Web sites Multilingual Web sites

• 63 of the Fortune 100 Websites available in English only

• 50 % of Online sales will be outside the US by 2004

• 60 % of Web Users live outside the US now

Source: Forrester « The Multilingual Site Blueprint »

Customer Complaints Resolution Customer Complaints Resolution Mechanism (CCRM)Mechanism (CCRM)

• Easy to useEasy to use

• Hot-link directly back to e-merchantHot-link directly back to e-merchant

• SecureSecure

• Basic “rules of the game” (e.g. e-merchant Basic “rules of the game” (e.g. e-merchant should acknowledge within one day should acknowledge within one day maximum and reply within three days maximum and reply within three days maximum)maximum)

Need for MultilingualismNeed for Multilingualism

• Automatic translation system Automatic translation system

• Multiple questions (yes/no)Multiple questions (yes/no)

• caveatcaveat that automatic translation is not that automatic translation is not perfectperfect

Follow ThroughFollow Through

• FEDMA believes that various mediation systems should be available. Over time the most effective will develop.

• The consumer should never be given the impression s/he is forced to use either the CCRM or ARD. The alternative of legal action should not be denied

ConclusionConclusion The CCRM is a first level for a complaint, followed by ARDs The CCRM is a first level for a complaint, followed by ARDs

and if the dispute continues, by legal actionand if the dispute continues, by legal action

Consumer Complaints Consumer Complaints Resolution MechanismResolution Mechanism

Alternative DisputeAlternative Dispute ResolutionResolution

LegalLegalActionAction

Thank you for listening

FEDERATION OF EUROPEAN DIRECT MARKETINGFEDERATION OF EUROPEAN DIRECT MARKETING

Website : http://fedma.orgWebsite : http://fedma.org

E-mail : info@fedma.orgE-mail : info@fedma.org