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CIAO DATE: 4/5/2007
Protecting Consumers from Cyberfraud
October 2006
Abstract
The Internet has become a basic fact of everyday life for millions of people worldwide, from e-mail to online shopping. Ever faster and more accessible connections available on a wider range of platforms, such as mobile phones or person to person portable devices, have spurred new e-commerce opportunities. Online shopping and banking are increasingly widespread and over the next 10 years, the Net is expected to become as common as gas or electricity. Google’s “Internet Chief Evangelist” Vinton Cerf, has predicted that by 2016, “everything from the family fridge to the office coffee pot … heating, cooling, and security systems … will be managed through the Internet; … by then, the Internet will become so pervasive that connecting to it will no longer be a conscious act.”
Will this prediction come true? And will consumers take full advantage of it? OECD ministers discussing the fledgling phenomenon of e-commerce in 1998 saw the huge potential of the business-to-consumer online marketplace. But they also recognised the threat that fraud would undermine consumer confidence. The following year, the OECD adopted E-Commerce Guidelines to foster fair commercial practices on line. But as the online marketplace grew, so did awareness that crooks could use cyberspace to dodge the law by locating in one country and targeting consumers in another. To address this, in 2003 the OECD issued guidelines for international co-operation among consumer protection authorities.
Today, the Internet offers consumers worldwide more choice and easier ways to purchase goods and services, but the electronic marketplace has still not realised its full potential. One reason frequently given is consumer concern about fraud. This Policy Brief looks at the various forms of cyberfraud, assesses their impact on the digital economy and examines what governments can do now and in the future to address the problem.
