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Source: The London Free Press

Posted on March 26, 2003

      Industry Canada has developed a draft e-commerce code of practice to help increase consumer confidence in online business. The Canadian Code of Practice for Consumer Protection in Electronic Commerce is a voluntary code to establish standards for electronic business.

      People may be hesitant to conduct business online because they may not feel fully informed about either the product or the vendor, may be concerned about divulging private information and may be confused about how to cancel an order or what conditions and warranties are attached. Consumers may not know what redress they have if they are dissatisfied with an online transaction.

      The code is being tested in specified industry sectors. It will then be reviewed and revised. The revised code is expected to be published this fall.

      Although the code neither has legislative status nor replaces existing laws, its thorough nature is a powerful asset. It invites businesses to uniformly address many consumer concerns, which may lead to an increase in consumer confidence and more electronic transactions.

      The code is divided into eight principles and two appendices. The principles describe policies for the provision of information, language, contract formation and fulfillment, privacy, security of payment and personal information, redress, unsolicited e-mail and communicating with children.

      One difficulty with contracting online is determining whether and how to complete a transaction. Consumers can often feel uninformed or misinformed.

      The code's first principle discusses a vendor's duty to provide information. It states a vendor must be truthful, clear and conspicuous in presenting information on its Web sites.

      Also, a vendor shall ensure a consumer is able to gain an accurate and fair description of the products or services being sold. The code states consumers must have a "meaningful opportunity to correct or cancel" an order before it is accepted by the vendor.

      Vendors are also obligated to provide information about their policies so consumers know how to register complaints, ask questions, obtain warranty information or seek service and repair information.

      In order to ensure consumers can track a transaction, a vendor is to, as soon as possible, provide a retainable record of a transaction.

      Information privacy is another concern of online consumers. The code's fourth principle states vendors are "to limit their collection, use and disclosure of personal information to that which a reasonable person would consider appropriate in the circumstances."

      This duty of privacy also remains with the vendor when it is required to disclose personal information to a third party. Before any such transfer, vendors must ensure the third party complies with the code's privacy provisions.

      The code's fifth principle states a vendor shall provide security mechanisms consistent with industry standards and appropriate for the nature of the personal and payment information collected. Vendors must ensure any third parties involved in the transactions comply with this requirement.

      The growth of e-commerce depends on consumer comfort with Internet transactions. The development of this code and its adoption by business is a step toward that goal.

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