As online transactions become more pervasive, it also becomes increasingly important that both consumers and online vendors become more fully acquainted with rights and obligations applicable to online transactions.
Few eager shoppers stop to consider the risks involved in adding another item to their virtual shopping cart or in providing their personal details to seemingly reliable business websites. For this reason, regulatory frameworks over the world are being tailored to protect consumers, even in circumstances where consumers purchase goods or services on impulse and later regret the purchase.
Various legal mechanisms
The South African Constitution, the Consumer Protection Act, No 68 of 2008, the Electronic Communications Act, No 36 of 2005, and the Electronic Communications and Transactions Act, No 25 of 2002 (ECT Act) are all applicable to electronic transactions and the protection of consumers who transact online. The Protection of Personal Information Bill will further flesh out consumers' rights to privacy and obligations applicable to businesses that have access to personal data. It is imperative that businesses selling goods or services online be cognisant of their legal obligations when marketing and supplying goods or services to consumers online.
The ECT Act provides that businesses offering goods or services for sale by way of an electronic transaction must make certain information available to consumers on the website where the goods or services are offered. The information that ought to be made available to consumers includes:
- Full name, legal status, physical address and telephone number of the business
- Any code of conduct to which the business subscribes and how that code of conduct may be accessed electronically by the consumer
- Sufficient description of the main characteristics of the goods or services offered to enable a consumer to make an informed decision on the proposed electronic transaction
- Full price of the goods or services, including transport costs, taxes and any other fees or costs
- Manner of payment
- Any terms of agreement, including any guarantees, that will apply to the transaction and how those terms may be accessed, stored and reproduced electronically by consumers
- Security procedures and privacy policy of the business in respect of payment, payment information and personal information
Cooling off period
Online businesses must provide consumers with an opportunity to review the entire transaction, correct any mistakes or to withdraw from the online transaction. The business offering goods or services online may be liable for any damage suffered by a consumer for failure by the business to utilise a payment system that is sufficiently secure with reference to accepted technological standards at the time of the transaction. Further, consumers have a cooling-off period of seven days of receipt of goods to cancel their entire transaction without penalty or reason.
Regulatory impact
Most countries have developed, or are in the process of developing, legislation that will affect every business as it diversifies on the Internet. When an online consumer purchases goods and/or services a plethora of jurisdictions could potentially be involved in the transaction, either through shipping, deliveries or transferring of monies electronically, which have their own online communications and transactions legislation to regulate the electronic communications and the transaction. It is therefore of utmost importance that online business owners become fully cognisant of the electronic communication laws that will apply to their everyday transactions.
As businesses expand and consider changing their business models either by diversifying physical stores by offering the same goods or services online, or choosing to embark on new online businesses, the regulatory impact has to be considered.
It may be helpful for businesses to ask the following questions to ascertain what the regulatory impact will be:
- Will any goods or services be sold online to South African consumers?
- How will consumers sign up to purchase the goods or services?
- What types of terms and conditions will regulate the provision of goods and services?
- When and where do consumers have access to the terms and conditions of the goods or services being provided?
- How will consumers accept to the terms and conditions of the provision of goods or services?
- How will the consumer's data be collected, stored, accessed and protected?
- Where will the customer's data be stored?
Access to the world of online markets is just a quick and easy 'click' away. Compliance with applicable legislation is not that quick and easy for online vendors particularly given rapidly evolving legislation and the global nature of online shopping.
