Consumer Complaint Handling for Cross-Border

Consumer Complaint Handling for
Cross-Border Transactions:
Theory and Practice
Hugh Stevenson
Deputy Director, Office of International Affairs
United States Federal Trade Commission
March 29, 2010
Ecommerce Dispute Resolution and the
U.S. Federal Trade Commission
•  1999: FTC conference explored consumer protection in the global
electronic marketplace. One conclusion was to encourage the
development of alternative dispute resolution.
•  2000: FTC/Dept of Commerce conference looked specifically at
alternative dispute resolution for online consumer transactions.
•  2001: FTC roundtable discussed business and consumer group
recommendations on the use of ADR for online consumer disputes, and
the proposal in the draft Hague Convention on Recognition and
Enforcement of Judgments on special jurisdiction rules for consumer
contracts.
•  2005: FTC hosted OECD conference to examine approaches to
consumer dispute resolution and redress around the world.
•  2009: FTC hosted OECD conference to discuss opportunities and
challenges for consumers in electronic commerce.
Outcome of the ADR
conference in 2000
•  Areas of consensus on consumer ADR:
– 
– 
– 
– 
– 
– 
Finding global solutions to address global transactions
Pursuing technological innovation
Pursuing multiple ADR programs
Ensuring fairness and effectiveness of ADR programs
Promoting consumer and business education
Linking ADR with action against fraud and deception
•  Outstanding issues:
– 
– 
– 
– 
What rules of decision should apply
The appropriate roles of governments and others
To what extent ADR results should be public
ADR programs as binding or voluntary
: a project of members of the
International Consumer Protection and Enforcement Network
(ICPEN)
Participating consumer agencies from 24 countries
What is econsumer.gov ?
• 
certified government law
enforcement and regulatory agencies in
ICEPEN member countries may access
the econsumer.gov complaints to investigate
and spot complaint trends.
Participation in econsumer.gov
•  Members may:
–  provide content to the site;
–  publicize the site;
–  Translate the site; and
–  Encourage enforcement agencies to sign a
confidentiality agreement to access consumer
complaint information.
•  Available in seven
languages: English,
Spanish, German,
French, Japanese,
Korean, and Polish.
•  Turkish being added.
•  Website currently
being updated.
Complaints against business may be submitted to
consumer agencies, and/or to ADR providers . . .
The nature of the complaint may affect where it
might best be addressed.
•  Consumers can
also try to
resolve their
complaints
through other
means:
1. ADR
2. Trust Seals
and escrows
3. Payment card
protections
1. 
ADR:
Online ADR
involves a
process through
which you can
contact an ADR
provider, file your
complaint online,
have the other
party respond
online, and
resolve the entire
dispute from the
comfort of your
own home with
no need to travel
and at minimal
cost.
1.  ADR:
Each of these ADR
providers has
certified their
compliance with the
ADR Guidelines
approved by the
Global Business
Dialogue in Ecommerce and
negotiated with
Consumers
International.
2.  Trust seals:
Some online
businesses are part of
“seal” or “trustmark”
programs that certify a
business meets certain
minimum standards.
Some companies offer
escrow services
through which a third
party (sometimes for a
fee) can hold your
money until you get the
goods or services you
ordered.
3.  Payment Card
Protections:
As a payment
cardholder, you have
many protections
against the
unauthorized use of
your payment card
(such as a debit,
credit or stored value
card).
Econsumer Complaints
Top Products or Services by Complaint Count1
January 1 – December 31, 2009
1Percentages
are based on the 11,431 econsumer complaints received from January 1 to December 31, 2009.
Federal Trade Commission
Released March 2010
Econsumer Complaints
Top Violations1
January 1 – December 31, 2009
1Percentages
are based on the 15,312 econsumer law violations reported from January 1 to December 31, 2009,
NOT the total number of econsumer complaints. One complaint may have multiple law violations.
Federal Trade Commission
Released March 2010
Econsumer Complaints
Consumers’ Method of Payment1
January 1 – December 31, 2009
1Percentages
are based on the 7,282 econsumer complaints from January 1 to December 31, 2009 where method
of payment was reported by consumers. 64% of consumers reported this information.
Federal Trade Commission
Released March 2010
Going forward
•  OECD recommendations on protecting
consumers across borders (2003), dispute
resolution and redress (2007)
•  US proposal in Organization of American
States (OAS) includes sections addressing
–  consumer agency enforcement
–  Payment card protections
–  ODR
OAS-ODR Initiative: Steps Forward
•  OAS ODR Initiative designed to promote consumer
confidence by providing quick electronic resolution and
enforcement of small consumer disputes across borders,
languages, and different legal jurisdictions.
•  Consumers may file a cross-border complaint on central
website against a registered business in another
participating state.
•  First phase: 20 days to negotiate settlement
•  Second phase: If no settlement, may escalate to ODR
provider for arbitration
•  National Administrator maintains list of participating
businesses and selects ODR provider from list of
approved providers
26
OAS-ODR Initiative: Steps Forward
•  Seat of arbitration for the process is the Vendor’s State
•  Role for consumer authorities
•  Administrators, state designated authorities, payment
processors may take appropriate steps to enforce
outcome where vendor located
•  OAS draft rules provide for a defined set of claims, and
“Arbitrator shall decide such claims and grant such relief
on an equitable basis, based on an interpretation of
these rules and without referencing or requiring proof of
applicable law.”
27
Thank you!
Hugh Stevenson
Deputy Director, Office of International Affairs
United States Federal Trade Commission
March 29, 2010
This presentation reflects my personal views and
may not reflect official views of the Federal Trade
Commission