Making online marketplaces safer for consumers
As the world celebrated another World Consumer Rights Day (WCRD) on March 15, 2018, global focus was on the fast evolving, ubiquitous marketplace enabled by the Internet.
The theme set for the 2018 celebration by Consumers International (CI), the global consumer protection watchdog, was “Making Digital Marketplaces Fairer” in recognition of the growing challenges of protecting consumers in a new market that transcends physical borders, ignores geographical boundaries and confirms the age old maxim that the world has truly become a global village.
In less than twenty years, the conventional definition of markets has evolved from physically defined and geographically identified spaces of commercial activity, to multiple intangible, boundless and real time e-locations enabled by the internet. Whereas subsisting consumer protection laws and guidelines attempt to protect consumers within physical locations and the sovereignty of national policies, research shows that up to 12% of all global commercial transactions now take place on the internet; intra and inter countries, between multiple currencies and with little or no physical contact between the seller or service provider on the one hand and the consumer at the receiving end.
E-commerce, enabled by electronic financial instruments has thus become our progressive reality. According to the Director General, Consumer Protection Council, Mr Babatunde Irukera in a Facebook post, a recent research by the Council show 67% of consumers between ages 18-40 now shop online; showing how important online markets are to commercial activity in Nigeria.
As to be expected, the issues of exploitation, unfair trade practices and sub-standard products and services, which gave rise to the need for government toprotect consumers in conventional markets, now occur at breathtakingly alarming rates online.
Consumer Protection regulators appear to be playing catch-up as the issues transcend the capacity of existing laws and regulations. More so, the challenges consumers face in the new marketplaces online are sometimes new, thus existing laws are inapplicable to check the excesses of most merchants in this nascent frontier.
Consumers daily fall victim to issues like lack of redress, misleading advertisement, outright frauds and scams and poor customer care with little or no regulation or intervention from regulatory agencies.
Though a few of the organized formal merchants online have shown initiative by establishing their own consumer protection structures to build confidence in their store, they are not directly supervised by any particular agency of government.
The first issue raised by the global watchdog is the lack of fair access to the Internet for millions of consumers around the world. Whereas the Internet is fast becoming an essential commodity in developed countries, nations like Nigeria are still struggling to make the Internet adequately available for the majority of consumers.
Even when consumers pay for data access, they rarely get value for money thus they are unable to maximize the full benefits of the online marketplace and the few who do, pay dearly for the privilege.
This challenge of access becomes even more critical as essential services like governance, utilities and financial services are now being digitized globally.
Consumers now need the Internet to apply for a driver’s license or national identity card, pay their taxes and access banking and other financial services. E-marketplaces must therefore be made more accessible, affordable and safe for every consumer in Nigeria.
Another critical issue is the menace of fraudulent transactions at e-marketplaces. The fact that businesses take place without any physical contact between the seller and the consumer creates a cover of anonymity which unscrupulous merchants hide under to exploit consumers through misleading advertisements, fake products or services, scams and poor after sales support.
Due to this, most consumers find it difficult to trust e-transactions or its providers. CI research shows 49% of Internet users in Nigeria claim they are wary of e-transactions because of the trust issue.
Consumer distrust of e-markets arises from the apparent lack of regulation or adequate legislation to police marketplaces online. Government seems to be taking its time to catch up with the digital economy, as it appears to lack the capacity to fully regulate and monitor the digital marketplace.
*Sola Salako Ajulo is a Consumer Rights and Protection Advocate and President/Founder of Consumer Advocacy Foundation of Nigeria (CAFON)