E-traders flout legislation

Leading retail Web sites are breaching laws that protect the rights of consumers when shopping online, and risk fines as a result, according to a recent survey.

Almost half of Internet retailers are currently breaking the law on consumer rights, according to a study of 50 leading e-commerce sites carried out by law firm Browne Jacobson. It found that while the UK's top 10 retailers comply with all the legislation, many firms in the top 50 of the Retail Week top 500 fail to do so.

Sites were assessed for compliance with key e-trade legislation, such as the Data Protection Act (DPA), the Distance Selling Regulations and E-Commerce Regulations.

Firms breaching the law included one that failed to provide an appropriate data protection consent form. Another alerted customers that personal data would be passed on to third parties unless they sent an email specifically opting out - this breaks the law, which dictates that consumers must opt in to receive marketing information.

Firms must ensure compliance with the law or could face fines, said Simon White, a solicitor at Browne Jacobson. For example, firms that process consumer data without obtaining consent and registering under the DPA are committing a criminal act, and could be fined £5,000. "One of the biggest failings of sites was not complying in spirit or in fact with the act," said White.

Firms could also face financial losses if they breach the Distance Selling Regulations. If consumers are not given a clear indication of the returns policy, they can claim a full refund for up to three months. "If companies are selling expensive goods, this is quite risky," said White.

Several steps must be taken to ensure full compliance. The first is for firms to check whether they collect and process personal data. If so, they must ensure they are registered under the DPA and have a system set up to request and record users' consent. Companies also need to make sure terms and conditions are easy to access and understand, and that they provide consumers with contact details and returns policies.

Firms must also prepare for the Disability Discrimination Act, which comes into force in October 2004 and requires sites to offer full access to visually impaired users.

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See also:

Data Protection Act

How the Data Protection Act affects the way firms can process information and monitor their staff  25 Aug 2003

Comment: No response is just bad form

Firms can be forgiven for stumbling over complicated Web-related laws. Less easy to excuse is failure to acknowledge their own online forms, says Madeline Bennett  14 Feb 2003

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