International law enforcement network builds consumer confidence in on-line buys
Consumers across the world can now have more confidence when making purchases online due to action by the International Consumer Protection and Enforcement Network.
"When it comes to consumer fraud no sector is off-limits", ICPEN President, and ACCC Commissioner, Mr Sitesh Bhojani, said today. "Last year, we cracked down on suspicious health products. This year, dodgy travel operators are being pursued".
"This year's sweep of the internet revealed a number of dodgy deals and claims. Consumers were lured to sign up to deals which claimed a 'total price' - but neglected to mention taxes, airport and travel agent fees or credit card fees.
"Other 'deals' featured a super-low price in a banner which was higher on a site – or not available at all.
"One site, for a 10-day trekking tour, required participants to also be models for future promotional material.
"And in some cases, inclusions are promised but not delivered. For example, a website targeting honeymooners offered champagne and chocolates on arrival as part of the deal, but concealed in the fine print that this carries an extra charge and must be booked in advance. This could destroy – or a least sour - a once-in-a-lifetime event for many newlyweds.
"As part of part of the sweep, 87 enforcement agencies in 24 member countries actively took part in. More than 5,500 websites were addressed, 1269 problem sites being identified.
"More people are are visiting travel websites to assist them in choosing their holidays. For example in Australia, travel website usage rose 21 per cent between October 2001 and May 2002, while Internet usage overall grew only three per cent.*
"For Australians, travel websites make up 17 per cent of all Internet activity – 1.37 million Australian hits were noted in May 2002. It is the second most popular item purchased via the Internet.
"There is no hiding on the Internet. Online anonymity is a myth. If traders breach the law, then ICPEN will find them, where appropriate sue them for refunds for consumers, and, if necessary, shut them down.
ICPEN offers the following tips to travelling consumers:
if the deal offered sounds too good to be true, it probably is;
satisfy yourself that you are getting a good deal by thorough comparison;
check that the trader discloses fulsome information about themselves, their location, price and inclusions, and terms and conditions;
know the trader’s policies on refunds;
obtain travel insurance if required, but if you are obliged to use a specified provider, report it to your local consumer protection authority as it may be a breach of law; and
if paying a significant sum, print off a copy of the representations about the deal for your own reference.
Members of ICPEN are arriving in Australia to take part in a conference on Consumer Protection in a Global Economy – Opportunities and Challenges. The conference will be held at the Brisbane Convention and Exhibition Centre from 10 a.m. tomorrow (Monday). The news media is welcome to attend.
Following the conference, the ICPEN will be meeting to discuss recent international activities: litigation, joint investigations, Internet Sweep, complaint analysis and information gathering and sharing between the 31 consumer protection agencies.
Internet Sweeps are only one tool being used by ICPEN to protect consumers. Network cooperation also extends to combating offline practices with international effects, including mail or telecommunications fraud.
"Network members are committed to cooperating across international boundaries to send a clear message about deceptive practices – those breaching the law can not avoid detection and escape action by locating overseas", Mr Bhojani said.
ICPEN has seen consistent growth in membership and activity since its inception 10 years ago and now includes 31 countries, as well as representatives of the OECD and the European Commission.
Communicating with each other about cross-border conduct to produce a coordinated effort is a high priority for most of the agencies.
The ICPEN meeting in Australia will strengthen international investigations through comparison and training.
Other matters for discussion are the topic for Sweep 2004, better sharing of expertise, improvements to the global consumer complaint site: econsumer.gov, and analysis of cross-border cases. ICPEN is also sitting in joint session with the OECD Committee on Consumer Policy for the first time.
Consumers who believe they have been a victim of deceptive practices on the Internet can register their complaint at www.econsumer.gov , ICPEN’s global online complaint mechanism. Seventeen member countries have access to this mechanism for the purposes of monitoring online conduct, and taking enforcement actions where possible.
Mr Mozelle Thompson, Commissioner of the US Federal Trade Commission and Chair of the OECD Committee on Consumer Policy; Ms Caroline Banks, Director of Consumer Regulation and Enforcement Division, UK Office of Fair Trading; Mr Raymond Pierce, Deputy Commissioner of Competition, Fair Business Practice Branch, Competition Bureau Canada; Mr Guido Sutter, Deputy Head, Legal Affairs Division, State Secretariat for Economic Affairs, Switzerland; Ms Deb Battel, Director, Fair Trading Branch, New Zealand Commerce Commission.
They may be contacted through the ICPEN Secretariat on (0408) 998 746.
*AC Neilsen's NetRating Survey quoted on www.travelbiz.com 14/2/2003
BACKGROUND
Problems identified on websites:
Misleading representations about prices, where a cheap price is used to attract travellers to the site, but then can not be obtained at all;
No information about insurance to cover financial failure of the trader (a legal requirement in some European countries);
Attempts to force consumers to acquire travel insurance from a specific provider by including it in the total package, or making it a condition of the contract;
Quoting “total price”, when compulsory or essential extras are not yet included, such as airport security fees, taxes, credit card fees, travel agent fees, or passenger duty; and
Attempting to disclaim responsibilities as mandated by laws, including warranties, refunds, and accuracy of representations made on the website.
Authorities in many Network countries have already asked for an explanation from these traders as a first step in enforcement action. Some countries have already started educating travel industry participants about other problems identified, such as:
Not disclosing a physical address, which is contrary to regulations in a small number of countries, but also considered international best practice since the OECD approved its Guidelines for Consumer Protection in the Context of Electronic Commerce in December 1999;
Inviting consumers to submit personal details and other information such as credit card and passport numbers without providing a secure server, and without alerting consumers to the fact that this makes them vulnerable to identity theft and fraud;
Failing to display a business registration number of many different types, which is compulsory in some countries, and covered by industry codes in others;
Attempting to apply terms and conditions to contracts with consumers without providing access to the conditions, or making them unclear or very difficult to locate on the site; and
Insufficient information about currency, jurisdiction, or inclusions.
Name Change:
ICPEN was formerly the “IMSN” – International Marketing Supervision Network. A decision was taken by the Network during the Australian Presidency to change its name to closer reflect its Consumer Protection and Enforcement activities. Hence, the new name International Consumer Protection and Enforcement Network.
Mission:
ICPEN’s main objective is to take action to prevent and redress deceptive marketing practices with an international component. The Network fosters cooperative efforts by member authorities to tackle consumer problems connected with cross-border transactions in both goods and services. Exchange of information between authorities also plays a key role in effective investigations and court action where necessary.
ICPEN members:
Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Estonia, EC, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Korea (Republic of), Latvia, Luxembourg, Malta, Mexico, Netherlands, New Zealand, Norway, OECD, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, UK, USA
Previous Sweeps:
For information on Sweep 2002 (health claims), Sweep 2001 (OECD Best Practice Guidelines), Sweep 1998 (health claims), or Sweep 1997 (get-rich-quick schemes), please go to the ACCC website, or contact
