1. Building Trust: Consumer Dispute Resolution (B2C) Louise Sylvan Consumers International

2. 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) ……

3. … do we have confidence? 65% use a PC 43% use the Net 5% transact

4. KEY CONFIDENCE ISSUES Novel Shopping – New requirements, new fraud opportunities Privacy Security Authentication Redress

5. Redress Consumers International study on providers of ADR online – released today – Follows on from consumers@shoppingconsumers@shopping – 8 key criteria for assessment of providers – Major deficiencies/areas for improvement – Conclusions and Recommendations

6. Online 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

7. What makes for a good 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)

8. What makes for a good 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

9. What makes for effective 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

10. What makes for effective dispute resolution? 2. Transparency – Up front disclosure of process and procedures – Publication of general statistics – Publication of arbitration results – critical

11. What makes for effective dispute resolution? 3. Availability – Geographically – Range of languages 4. Affordability – Preferably free to consumer, or very low fees

12. What makes for effective dispute resolution? 5. Effectiveness – Visibility, easy to find – Timeliness – Competence of officers – Ease of use – Enforceable – arbitration binding on the business – Subject to oversight

13. What makes for effective dispute resolution? 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

14. What makes for effective dispute resolution? 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

15. Results - Consumers International Initial Study of ADR-online Overview assessments of online ADR providers – no grading this time 30 providers 25 North American, 5 European offering 36 distinct services – Few designed specifically for consumers 23 for profit companies

16. Results - Consumers International Initial Study of ADR-online None met all criteria Generally well described procedures Too little attention to language - English Few assisted with unco-operative merchants None of the business providers balanced their governance structures – consumer and business representation

17. Results - Consumers International Initial Study of ADR-online Many limited their applicability Most were disproportionately costly Few reported well or transparently Most were visible (easy to find), timely and easy to use

18. Conclusions & Recommendations Good online ADR should help reduce likelihood of needing court system Doesn’t solve applicable law or forum ADR suffering same problem as plethora of seal programs – too messy, too unsupervised for consumer trust to build, most still not meeting essential standards

19. Conclusions & Recommendations 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)

20. Conclusions & Recommendations Catering for non-English speakers essential Costs can’t be higher than most B2C disputes Consideration of balanced governance needed - credibility Better transparency and reporting – not business “protection” services

21. Conclusions & Recommendations Inappropriate “mandatory” ADR and “binding” clauses need to be eliminated Global standards needed Ongoing independent oversight needed for trust to build