E-commerce in Consumer Relations

Continuous technological evolution coupled with the expanding availability of Internet access has transformed e-commerce (electronic commerce) into one of the world’s fastest growing economic sectors.

One of this sector’s most recent developments, which has been very popular in Brazil, involves sites that offer huge discounts on group purchases, also known as buying clubs. Following an international trend, Brazil’s Internet market has adopted this virtual buying practice that is usually conducted on impulse due to the product or service’s low cost.

When a promotion is run, a group buying site provides information about the nature and terms of the deal, one of which is that the purchase is final. This term is in violation of the Consumer Protection Code (CPC). In this case, which should prevail: the principle of transparency concerning the site’s information or the law’s provision?

It is clear that the Brazilian Courts consider that the Consumer Protection Code should be applied in Internet consumer relations. However, technological advances have been disproportional to legislative advances, which leaves the parties involved only partially protected and leads to serious problems in solving new types of disputes.

As consumer relations involving business establishments, those that occur online must also respect the principle of transparency. A company’s site must provide information to its consumers that is clear, accurate, easily seen and in the Portuguese language, describing the products and services with information such as: quantity, content, price, guarantee, expiration dates and origin, in addition to warnings about any risks to consumer health and safety. The images used to depict the products must also reflect their main characteristics and not constitute false advertising.

Since in Internet consumer relations information is standardized and sent via a website, meaning the product cannot actually be inspected, it is important that costumer service channels be very accessible so that consumers can ask any necessary questions before finalizing their purchase.

Currently, under the Consumer Protection Code, article 49, consumers may change their minds when products or services are acquired outside a place of business. In these cases, the consumer may break the contract and the orders may be cancelled or returned within seven days of entering the agreement or receiving the product, without cost to the consumer.

The House’s bill No. 182/2008, which is pending Senate review, considers changing the merchandise return period considered in the CPC’s article 49. The bill would extend the period for refunds and return of items purchased online from seven to fifteen days.

The biggest risks associated with e-commerce concern the security of payment methods, fraudulent registration information and merchandise delivery. Once risk involves the use of cloned credit cards or bank accounts penetrated by hackers. Another involves fraudulent registration information, since it is difficult to ensure a consumer/buyer’s identity. Delivery also presents risks, as these are made to the address indicated when the buyer registered on the site, and also that usually these are made by sub-contracted delivery companies.

It is important to highlight that the post-sale period must be as well structured and controlled as the time of sale itself. E-commerce sites must have channels for complaints, preferably more than one type of channel, in a place and format that is easily identifiable. These channels facilitate resolution of possible disputes arising from the business risk.