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Motion made,

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Hon. Members: Object.


Motion made,

Hon. Members: Object.


Motion made,

Line 37, before the word 'European' insert the words 'Environmental Audit Committee or with the'.--[Mr. Betts.]

Hon. Members: Object.

8 Dec 2000 : Column 322


Motion made, and Question proposed, That this House do now adjourn.--[Mr. Betts.]

2.30 pm

Mr. Brian White (Milton Keynes, North-East): I should declare an interest. I am a member of Eurim, which brings together parliamentarians and industry to discuss information technology matters with the Government.

Before I left for the debate, I received a telephone call from the Consumers Association which seemed to warn me not to comment on it. I did not intend to talk about the Consumers Association, and found its call threatening and disturbing. However, I shall return to that later in my speech.

Security and confidence in online shopping, and business online generally, have yet to develop fully in the United Kingdom. Many people in the internet industry have come to view trust marks and certification schemes as an excellent opportunity to further the e-commerce market. Trust marks will help to provide confidence and a system of recourse in buying and selling online and in business-to-business transactions. However, there are many certification schemes and trademarks, and the number of them is rapidly increasing. I am worried that, instead of building public confidence, it might cause confusion.

Public awareness of such schemes is quite low. The Government have rightly backed the TrustUK scheme to tackle that problem. The umbrella organisation brings together various schemes and ensures that they conform to criteria and that websites which carry the TrustUK hallmark--either on its own or with other symbols--give consumers, at a glance, the confidence that they are safe to do business with that website. Consumers can be assured that that company will adhere to high levels of business standards on a diverse range of issues such as privacy, delivery and returns, security of payment, quality of goods and consumer assistance.

I emphasise that my concerns about TrustUK are based on a belief that it is a good idea. The Government are to be commended for creating it. I am worried about its operation in the first few months since it has been established. Anything critical that I say should be seen in the context of my support for it.

It could be argued that TrustUK has only been running since August and it is early days, but it took two years to set up and there were warnings that instead of using a system of self-regulation, it would rely on self-declaration. I am concerned that those warnings by people in the internet industry have gone unheard.

I have looked at TrustUK's website to see what it is trying to achieve. I am worried about self-declaration. TrustUK seems to be setting itself up as a body that recognises codes of practice instead of providing a mechanism so that buyers can have confidence in individual merchants. Its web page says that TrustUK

There are no tests carried out on the statements made by the code owners; they merely sign up to the code.

The website goes on to say:

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There is no evidence of that implementation being tested before the trader signed up to the code of practice, or subsequently, when the code of practice was approved by TrustUK. I am concerned that it is down to the individual code of practice owner to determine whether that is happening, not TrustUK.

My fear, which I shall come to shortly, is that not conforming to the codes of practice could undermine TrustUK. At present, that is not a problem. However, if this does not develop into self-regulation in the long term, it could become a major problem for us.

TrustUK is a non-profit-making organisation owned by the Consumers Association and the Direct Marketing Association. My understanding is that there are three codes--the DMA's, Which?webtrader--owned by the Consumers Association--and the Association of British Travel Agents. I do not think that ABTA's agent is accredited, but I stand to be corrected by the Minister.

With regard to the Consumers Association, there is a potential conflict of interest. When I got the telephone call this morning, I wondered why. Is the association concerned because Which? carried out a study on internet service providers and included its own Which? web page? Does it carry out advertising practices which it has condemned other organisations for in the past, such as using gimmicks so that people will join? Could it be that the last time I raised concerns about an organisation that was supposed to be looking after the interests of consumers--the National House-Building Council--it was found that the Consumers Association, far from protecting consumers, was actually part of the problem? I do not know the reason for that telephone call this morning, but it started making me think about the Consumers Association, which I previously had no intention of referring to in my speech.

My concern about the procedures used by TrustUK is that there is no independent audit of the merchants before the certificate is issued, and no monitoring afterwards. TrustUK is very good at reviewing the codes of practice, but the lack of requirement regarding the process that the code owners then use and their monitoring of how the code user monitors its traders is a real problem.

We looked at a sample of eight merchants accredited by TrustUK which show the TrustUK logo, although some did not display it. In some, there were no references to security, as required by TrustUK. There was no opportunity to complain which, again, is required by TrustUK.

TrustUK promises to provide strict accreditation criteria, against which any code must be matched, ensuring that minimum standards are in place for consumer protection. However, that is only at the point at which the accreditation is given--there is no way of checking that that continues to be the case. In the sample, we found that although that had been true, it was no longer true. The statements of code owners about bringing the various schemes and hallmarks together are not tested. The sample showed that various hallmarks and trust marks were used. In one case, shoppers could not opt out

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of providing personal information before supplying it. The company in question, which has an entry in the data protection register showing that it trades under 21 other names, collected personal data for the purposes of credit reference, trading in personal information, crime prevention, prosecution of offenders and keeping details of offenders and suspected offenders. Shoppers had to provide the information before being able to opt out, yet the TrustUK logo was being used.

None of the sites that we looked at had any reference to complaints, either to the code owner or TrustUK. That is worrying.

As TrustUK develops, how do we monitor it? I know that it has to provide a report to the Office of Fair Trading, but is that sufficient? There are questions to be answered about how TrustUK is monitored. The initiative is a good one, but I have concerns about accountability.

All code subscribers must display the hallmark on their website, and I am concerned that that tends to restrict it to the UK, even though much internet trade is global. A UK-centric approach has the potential either to mislead consumers or to restrict opportunities for UK-based traders in the global environment.

TrustUK is a welcome initiative in that it provides a recognisable image for web traders and enables consumers to have confidence. However, there are myriad certification schemes, some paid for, some free, and the tendency is to treat all of them as being of equal value and, at the same time, potentially equally flawed. That becomes apparent when we see that certain members of the internet industry have criticised TrustUK for having a less than rigorous approval procedure.

In the monitoring of certified websites, there is no common practice between the different certification schemes. TrustUK faces calls to raise its minimal requirements in terms of approval and monitoring criteria, by including matters such as third-party verification. Although I do not advocate any particular scheme, I recognise that some of the paid-for certification schemes have a problem with that.

Consistent monitoring of websites as a standard condition of the hallmark provides a guarantee. Without it, there is a risk that TrustUK could undermine all certification schemes. I have a dreadful fear of Anne Robinson telling TrustUK:

and of e-commerce in the UK being undermined. Some certification schemes used in other countries employ third-party verification and enforce a consistent form of monitoring. The key is that there is review following approval, and that is where TrustUK lets itself down. We can generate confidence in e-commerce and the fact that there are many certification schemes need not be a problem, provided my concerns are addressed and a monitoring procedure is introduced.

The UK schemes are designed to generate greater e-confidence in this country, but e-commerce, by its very nature, is cross border. I am glad that there are no Conservative Members present, because they would jump up when I say that there is a European dimension to the issue. My hon. Friend the Minister is aware that that aspect must be addressed in current negotiations with the European Union, and that as EU e-commerce develops we have consistent standards that enable us to resolve cross-border issues, jurisdictions and national consumer laws. I realise that those will be difficult negotiations, but they are critical if e-commerce is to flourish here.

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It is early days and most certification schemes are still in their infancy. I suspect that many of my concerns will be sorted out as practical steps are taken. I raise the subject in today's debate because I believe that the Department of Trade and Industry has a responsibility. I have long known that Governments are good at generating policy and allocating money and other resources, but bad at following through in implementation. There are several examples throughout Government of implementation being treated as if it were an add-on, not an essential part of the delivery of Government policy, and I fear that, if we are not careful, TrustUK will become another example. I hope that the implementation of TrustUK is properly handled by the DTI and that we establish a public sense of security and confidence in the hallmark.

I am concerned about one more aspect of TrustUK. I refer to trade bodies that cannot deliver all their members because they do not have the necessary enforcement schemes to ensure that all their members are consistent, or bodies such as the British Bankers Association, whose complaints procedure is dealt with not by the trade body, but by an ombudsman. TrustUK does not cover such a case, as it relies on the code of practice owner, the trade body, to deal with complaints. That aspect needs to be taken into account.

I conclude by going back to where I started. I have raised a number of concerns because I want TrustUK to succeed. It is a good initiative, it has had a good start, and it has the potential to make Britain the best place for e-commerce. I do not seek an instant response from my hon. Friend the Minister, but I want her to take those concerns back to her officials and to TrustUK, and to work with consumer groups and the industry to ensure that those practical problems are taken seriously by TrustUK and that practical solutions are developed.

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