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. Regulatory frameworks over the world are, for this reason, being tailored to protect consumers even in circumstances in which consumers purchase goods or services on impulse and later regret the purchase.
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:
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.
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 the utmost importance that online business owners become fully cognisant of the electronic communication laws that will apply most regularly 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:
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.