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Report: Web firms must do better for foreign punters

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More companies need to participate in cross-border online trading in order to improve competition and help attract more consumers with lower prices, a new report by consumer organisations has said.

The report said the online shopping experience has improved for consumers, with 94 per cent of cross-border orders being successfully delivered. However, the report highlighted some concerns with businesses' compliance with EU consumer laws and said that websites could do more to build consumer trust in cross-border trading.

"The market needs more traders who are willing to sell online across borders," the report (75-page 4.29MB PDF) by a working group of the European Consumer Centres' Network (ECCN) said.

"It seems that both traders and consumers would benefit from more transparency in the market in the long term, as transparency would contribute to minimising the differences for a trader to sell to the domestic market only or to sell across borders," the report said. "If more traders would sell online across borders, it would also provide for a wider range of products for the consumers to select from. This would further make the market more efficient and create healthy competition in the market, which would ultimately benefit the customer with lower prices."

The ECCN is made up of consumer centres in each of the 27 EU member states as well as centres in Norway and Iceland. The centres deal specifically with complaints from consumers about cross-border trade. The organisations are part funded by the European Commission and individual member countries.

The ECCN working group employed 17 'mystery shoppers' to conduct tests on cross-border shopping over the internet. The shoppers made 305 purchases from websites across 28 different countries. Most products were delivered successfully, but the shoppers were not always given enough information about who they were trading with, correct information on traders' returns policies and cost, and information on whether the sites were secure, the report said.

Under the EU's Distance Selling Directive traders must display contact information, provide details of the final cost consumers can expect to pay for goods and services, including delivery costs and any additional charges, and display information explaining the consumers' rights to withdraw from the transaction and receive a full refund if they return the goods received within at least seven working days unless an alternative arrangement has been agreed.

"In 3 per cent of the cases, information about the trader could not be found. Even if this figure seems relatively low, it is still one of the most essential pieces of information the consumer needs about the trader," the report said.

"It was troubling to find that mystery shoppers reported in 12 per cent of the cases that an email address could not be found, especially when considering the medium used for communication between the trader and the potential buyers is electronic," it said. "The existence of an email address is a signal to the consumer that the trader is easy to reach if it should be necessary. It is therefore distressing to see that so many traders do not provide this possibility."

"In 95 per cent of the purchases, the terms and conditions were available before entering into a purchase process, but the legal requirement to inform about the cooling-off period was only met in 82 per cent of the purchases," the report said.

"This means that in 18 per cent of the purchases, the mystery shopper was not informed about the legal right to withdraw from the contract. This is a rather disturbing result. However, it was worse to discover that the websites contained information about the legal warranty and the rights connected to it in only 37 per cent of the purchases. Furthermore the information given about these rights was only correct in 80 per cent of the cases," it said.

The EU's E-Commerce Directive also obligates traders to provide information on the transaction process as well as allow consumers to review the details of an order before placing it. The report said that the mystery shoppers were only presented with review information on 89 per cent of occasions tested and that almost a third of all traders did not provide information on how to complete the purchase in the first place.

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