Friday, 21 June 2013

How Consumers Are Protected In E-commerce Business To Customer

Although e-commerce provides a number of advantages for consumers over traditional trading methods, a major concern people have about doing business online is falling victim to financial crimes such as scams and frauds.

This is very logical because e-commerce is based on electronic data and financial transactions between sellers and buyers who do not know each other. So let's now find out how consumers are protected in the e-commerce industry and why it's safe to buy online.

E-commerce Is Regulated By Various Agencies

Most electronic commerce activities are regulated by authority bodies and laws which online organisations have to adhere to. Some of these laws may apply to the e-commerce industry in a specific country or the entire world. For example, the Federal Trade Commission (FTC) in the United States have laws in place concerning the use of commercial e-mails, online advertising and consumer privacy.

Other regulatory bodies includes The CAN-SPAM Act of 2003 that establishes national standards in the U.S for direct marketing over e-mail.

There is also The Federal Trade Commission Act (FTC) that regulates all forms of advertising, including online advertising, and makes a statement that advertising must be truthful and non-deceptive. As a result of such laws regarding e-commerce trading, online businesses can face cases and judgement if unfair or deceptive practices are done towards the customer.

Online Payment Service Providers Are Subject To Protect Consumers From Financial Crimes

A payment service provider (PSP) online is an organization that offers online sellers a system for accepting electronic payments from customers by a variety of payment methods including credit card, direct debit, account transfer and bank transfer.

Popular PSPs online include Paypal, Payza, Google Wallet,WebMoney, Payoneer and Money Bookers.

The major payment service providers online are U.S based, and they are supervised by the Financial Crimes Enforcement Network (FinCEN). This is a bureau of the United States Department of the Treasury that collects and analyzes information about financial transactions in order to combat money laundering, theft, frauds, and other financial crimes.

Also, payment service providers can offer risk management services that's beneficial to online buyers such as refunds and reporting merchants ratings and trustworthiness.

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