Shoppers wary of Net purchases

Companies risk losing millions of pounds of business because concerns about security and privacy are deterring potential customers from buying goods over the internet.

According to a Consumers? Association (CA) report, during 1995 about $500 billion of credit card transactions took place compared with $500 million of purchases over the Net.

The report, entitled Consumers Transactions on the Internet, stated that the internet has the potential to generate $100 billion of revenue by 2000 if buyers? reservations are addressed.

The CA claimed there was no need to draw up laws to deal with the internet market, but said steps must be taken to win consumer confidence in purchasing goods remotely.

Focusing on security issues, the consumer watchdog stressed the importance of clarifying the legal position and liability of customers purchasing goods over the Net. The CA made it clear that Web site traders and internet service providers (ISPs) should take responsibility for third-party breaches of security.

Also a contractual agreement with the customer should ensure that net traders pay compensation if security is breached.

The report proposed that a self-regulating body should be established to provide a framework covering security and privacy issues, based on the European Union (EU) distant selling directive.

But as the EU directive is due to be implemented in 1999, the CA argued that action should be taken now. It also called for a single UK communications moderator to oversee the self-regulatory body.