building trust: consumer dispute resolution (b2c) louise sylvan consumers international

Building Trust:Building Trust: Consumer Dispute Resolution Consumer Dispute Resolution (B2C)(B2C)

Louise Sylvan

Consumers International

Consumers InternationalConsumers International

Global federation of 263 independent consumer organisations in 119 countries

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 ISSUESKEY CONFIDENCE ISSUES

Novel Shopping– New requirements, new fraud opportunities

PrivacySecurityAuthentication Redress

RedressRedress

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 ProvidersOnline ADR Providers 1-2-3 Settle.com AllSettle.com BBB Online clickNsettle.com Cybercourt Cybersettle E-Mediator eResolution iCourthouse iLevel Internet Neutral Internet Ombudsman Mars NewCourtCity.com NovaForum.com

ODR.NL Online Resolution Online Ombuds Office OnLine Disputes Resolution Forum SettleOnline SettleSmart SquareTrade The Virtual Magistrate U.S. Settle WebAssured.com Web Dispute Resolutions WEBdispute.com Webmediate Web Trader

What makes for a good What makes for a good dispute resolution process?dispute resolution process?

Lots of experience offline in ADR– Needs co-operation between parties– Can be complaints assistance, mediation,

arbitration

Online adds additional dimensions– Some efficiency (eg. Geographically)– Some innovation (automatic)

What makes for a good What makes for a good dispute resolution process?dispute resolution process?

First, the firm has a good complaints handling, money-back guarantees, etc

ADR comes after the firm and the consumer can’t agree

What makes for effective What makes for effective dispute resolution?dispute resolution?

8 key principles– Based on EU and TACD; GBDe

1. Independence/Impartiality– Of the provider– Of the officials handling disputes

Raises issues of:– Consumer representation, balance– Funding by business


2. Transparency– Up front disclosure of process and procedures– Publication of general statistics– Publication of arbitration results – critical


3. Availability– Geographically– Range of languages

4. Affordability– Preferably free to consumer, or very low fees


5. Effectiveness– Visibility, easy to find– Timeliness– Competence of officers– Ease of use– Enforceable – arbitration binding on the

business – Subject to oversight


6. Fair: Due Process– Both parties heard– No need for (prohibition of) legal representation

7. Legality/Liberty– Voluntary– Does not limit rights nor displace law enforcement

actions– Decisions binding on trader not consumer


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 - Results - Consumers International Consumers International Initial Study of ADR-onlineInitial Study of ADR-online

Overview assessments of online ADR providers – no grading this time

30 providers 25 North American, 5 Europeanoffering 36 distinct services

– Few designed specifically for consumers

23 for profit companies


None met all criteriaGenerally well described proceduresToo little attention to language - EnglishFew assisted with unco-operative merchantsNone of the business providers balanced

their governance structures – consumer and business representation


Many limited their applicabilityMost were disproportionately costly Few reported well or transparentlyMost were visible (easy to find), timely and

easy to use

Conclusions & Conclusions & RecommendationsRecommendations

Good online ADR should help reduce likelihood of needing court system

Doesn’t solve applicable law or forumADR suffering same problem as plethora of

seal programs – too messy, too unsupervised for consumer trust to build, most still not meeting essential standards


Too little consideration of type offered – eg. inappropriateness of mediation for many B2C disputes; more thought for consumer designed services

Serious enforcement problems – “No Teeth”– 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)


Catering for non-English speakers essentialCosts can’t be higher than most B2C

disputesConsideration of balanced governance

needed - credibilityBetter transparency and reporting – not

business “protection” services


Inappropriate “mandatory” ADR and “binding” clauses need to be eliminated

Global standards needed Ongoing independent oversight needed for

trust to build

building trust: consumer dispute resolution (b2c) louise sylvan consumers international

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