Online shopping is in, but it is fraught with problems. What must be done to alleviate customer grievances?

E-commerce is sweeping the world today, and our country is experiencing an exponential growth in online shopping. The greatest benefit of e-commerce is the time saved, and the fact that the consumer is able to complete his transaction with a single click of the mouse. Product information is more extensive and price / product comparisons are also possible, enabling consumers to make informed choices.

Despite the positive aspects, on-line shopping also presents several risks that need to be dealt with. Thanks to higher exposure of credit cards, there are grave theft and fraud issues, besides the frustrating problem of information misuse for marketing. There are also issues of wrong, damaged or delayed delivery.

In fact, in the last few months, we have dealt with complaints against a leading Indian company for delayed and wrong delivery.

Privacy infringement and the non-negotiable nature of online shopping contracts are other areas of consumer dissatisfaction. Also, consumers cannot resort to conventional methods of grievance redressal as the seller is often anonymous, with no geographical location or address, and only a website.

The Information Technology Act, 2000, last amended in 2008, reflects the growing importance of the Internet in an average Indian's life. The main issues that are looked into include hacking, privacy, regulating authority and punishments for wrongdoers. However, this law does not focus on the interest of online shoppers, and is, therefore, of limited use to consumers who face problems while shopping online.

It is also difficult to use the Consumer Protection Act, 1986, to resolve online shopping complaints, given the need for documentary evidence (in online purchasing, the availability of documentary evidence is restricted).

Further, since the Internet has no geographical limits, establishing cyber jurisdiction is yet another difficult task. Suing a retailer based overseas can be difficult, expensive, time consuming and it might not be clear from the website where the supplier is based.

Also, the contract may be governed by the laws of the country from where the goods were supplied, rather than where it was bought. Legal action could include having to start court proceedings in the retailer's country, thus inconveniencing the consumer to a great extent.

Our CP Act very clearly specifies the norms for deciding the jurisdiction — 1) where the seller / service provider resides or 2) where the seller / service provider carries out business or 3) where the cause of action arises.

It is interesting to note that in the U.K., where the Rome Convention (Rome I) is followed, the parties have the choice of law for contracts. Thus, if the conclusion of the contract was preceded by the opposite party a) addressing a specific invitation to the consumer or b) advertising in the country where the consumer lives and takes all the steps necessary for the conclusion of the contract in that country or c) receiving the consumer's order in that country, the applicable law to the contract will be of that country where the consumer resides and the local courts in the country will have jurisdiction over all claims and disputes arising from such contracts.

It will be a great windfall to online shoppers in India if similar provisions were incorporated in the CP Act, 1986. Another option would be to integrate prohibition of the functioning or online selling of any website in India, if it does not have its presence in the country. Though this might sound rigid, it will definitely benefit the consumers at large and will help minimise the risks associated with online shopping.

(The writer works with CAG, which offers free advice on consumer complaints to its members. For membership details/queries, contact 24914358/24460387 or helpdesk@cag.org.in)