Examination of Witnesses (Questions 944
WEDNESDAY 24 MAY 2000
944. Good afternoon, to you as well. Could I
seek to persuade you to speak slowly. I know it is very difficult
indeed when you are only given a couple of minutes each, but if
you would, please. And also, for those of us who do not hear the
best, could you shout out loud also, it would be very welcome
indeed. Yours is "Building Consumer Confidence". Thank
you for the paper. Now we are awaiting with interest to listen
to the supplementary points.
(Mr Parnaik) Lord Chairman, ladies and
gentlemen, as you are aware, we have gathered all the information
you have given us and taken a consumer's point of view, listed
here in front of us. We would just like to highlight a few of
the things we have mentioned of specific importance to us as consumers
and as students. As shown in the evidence, the Customer Association
actually did a survey considering what bothered consumers joining
the internet. Over half of them said fraudin most cases
credit card fraud. The ironic twist to this is that there actually
has not been a case of credit card fraud in the UK over the internet
as such, so this would divide the camp into two schools of thought.
One side would say, as in the early stage of that, that the internet
is risky; financial transactions over the internet are risky,
but conflicting with this is that of some people consulted, who
actually say that it is not any more risky than any other financial
transaction, which would imply a more educational kind of role.
Stemming from matters of security perhaps would be the levels
of crime on the internet. In the general public the most famous
crime they have heard about on the internet is that of child pornography.
This was also stated from the First Tuesday Club, which was set
up, basically, to combat this. Now, the environment of crime is
more of a parental concern than anyone else because they do not
want to enter an environment in which crime is growing. They do
not want to have their children exposed to things that they do
not want them to be exposed to. Also, there is a lot of confusion
about legal matters over the internet. Customers do not seemand
personally we have not seen from the evidencea clear indication
of what consumers rights are on the internet. I hand you straight
on to Mr. Mehta to talk about access.
( Mr Mehta) Lord Brooke, the first point I address
is about access, and essentially there are three points that need
to be addressed with regard to access. The first is the need for
high speed. At the moment, most of the institutions do have very
high speed connections, but when it comes to consumers and their
homes, most of them have to use modems. We believe that this will
eventually be overcome in future by the involvement of technology
such as optical fibres which are being pursued by departments
in companies such as BT, Vodafone and Motorola. The second point
is about low cost. There can be two points to this. First is the
cost of actually accessing the net. At the moment British Telecom
is charging probably twice as much, if not more, than other countries
such as Australia and the USA. The second point is actually about
buying the PCs. From the evidence we read, one of the points mentioned
was that Sweden has actually lowered the taxes on buying PCs which
obviously would encourage consumers to buy them and utilise the
internet more. The third point is about being accessible to all
members of society. This includes disabled, handicapped and those
have less income. Much of the evidence has stated that perhaps
the Action Plan of the EU should address this in more detail.
Leading on from this, I would like to mention a few points about
promotion. The first one will be that to promote, probably the
most obvious way of promoting is by media, by providing education
to students, gurus, seminars and general information available
on books and on the web. But as well as this, an interesting point
was brought out by the London Investment Banking Association that,
perhaps to promote it, we should maybe utilise those industries
that have really succeeded drastically. One such sector could
be the financial services industry. Continuing from this, there
is one point which much of the evidence or many of the companies
have made, that we seem to be trying to compete directly with
the US in terms of developing dot.com companies. Perhaps we should
not do this, but try to focus on our strengths which are, namely,
mobile telephony and digital television, and to try and pursue
e-commerce by these media. Last but not least is the point about
open source information. Perhaps this does not apply as much to
consumers, but the point raised here is that when you develop
software for the internet, it should be such that individuals
can use it, can develop it and adapt it to tailor-made needs.
This means that the coding encrypted in it, and the software development,
must be open so that they can access it and change it as they
require it. That is it for access and promotion. I will now hand
over to Mr Asfaw to talk about the quality of service.
(Mr Asfaw) Lord Brooke, I would like to point out
that in a sense I am at a disadvantage in that, in my use of the
internet, I am not as good as everybody else, as my esteemed colleagues.
But I think, because of that, I have an advantage over them because
the factors that hit me the most are the ease of using it. I do
not really care so much about graphics. I just care about how
trustworthy it is, and can I get what I want. That is why one
of the points I would like to point out is the quality of service
is crucial, in that the dialogue must be a dialogue between consumers
and businesses. As when you walk into a classical store, you ask,
and you are directed to what you want. The ability to get redress,
no matter what happens, is the key to ensuring the power of the
consumer. I would never buy anything on the internet if I do not
have the power, the assurance, that I am in control of what I
am looking for. Second of all, I would like to point out one of
the untapped markets is delivery to people living in rural areas.
I think that is a crucial thing because, as it stands, according
to the Welsh Consumer Council, people living outside a ten mile
radius of that branch cannot get anything, but most poor people,
people who are less advantaged, live outside that ten mile radius.
That helps businesses if they tap into that market. The most important
thing is that it helps the consumers because, at the end of the
day, as I think Americans have succeeded in proving most of the
time is that the consumers lead everything, and you need to direct
everything towards that.
945. Thank you very much indeed. Why do you
say you think you are behind your colleagues?
(Mr Asfaw) I know how to get what I want on the internet.
Whenever they go on to the internet they know how to download.
I do not know how to download anything. I am not too good at that
sort of stuff. But I know that it took me a long time to build
up the confidence to join Amazon.Com.
Chairman: Lord Paul would like to open it.
Lord Paul: Just to get to that question. What
I would really like to know from all of you is why is it that
Asian students love the internet, and it is true in America, it
is true here. Of course India is doing a tremendous job. And the
Asian girls are better even than the boys. Any explanation?
946. There is a disagreement there in the second
(Mr Parnaik) You are saying that Asian girls are more
in tune with the internet than Asian males? Yes?
947. This is my experience.
(Mr Parnaik) I think it is actually more a case of
Asian females are more experienced on the net than males are.
I think it is more of a case of the up-dating; they see the opportunities
more clearly than males can. I cannot give you a direct answer
to that, but it seems to be the case.
948. Why the Asians are taking to it with far
more seriousness than people in the Western world?
( Mr Mehta) From my point of view, I did not observe
this directly for myself and I have not seen it, but if it is
the case I believe it is because the Asians have identified it
as a completely different means of doing business, a different
distribution channel to access the customers. Perhaps they see
this or they want to utilise this, more so than other cultures.
This is why they are pursuing it more and more. They have more
and more investment in it.
949. Just to follow on. What made you interested,
all three of you, in this internet? What prompted you to get more
deeply into it?
( Mr Mehta) Probably Imperial College, because of
how much emphasis they put on computers and technology. I think
we have a lot of exposure to high technology there.
Chairman: Lord Faulkner?
Lord Faulkner of Worcester
950. I would like to ask our friends, if they
were running a credit card company and you were aware of what
you told us, indeed which we have had a number of times in our
evidence, that the main obstacle for consumers in buying on the
internet is the worry that their card is going to be copied or
details stolen, or whatever. How would you tackle that problem
of confidence? The reality, as you rightly say, is that there
has been no credit card fraud as is known, but the perception
is that it happens all the time. They do not seem to have got
over that. How would you advise them to get over that?
(Mr Asfaw) It is one of those things. Actually, one
of the subjects I got into quite deeply is the promotion of the
fact that there are high security levels. It is very safe. It
is a good idea to promote the fact that it is safe currently,
but the fact that the OECD in, I think it was, Ottawa in 1998,
one of the stipulations was that businesses must lead, and government
should follow, and not the other way round. So I think a credit
card company should take the initiative and just keep stipulating
and keep bringing up the fact that it is safe; and the government
should promote that behind them. That is the best way; promotion
of what they have in their record.
(Mr Parnaik) I should like to answer that. My risk
on the Internet and i-box.com is to do with mobile communications.
And the trade by transaction list stated that we use "xxx"
company to trade world transactions which in my mind has justified
that. Trust comes into it at the moment, I believe, because it
is difficult to say which ones are viable and which ones are not;
which ones are good and which ones are bad, but simply creating
the credit card trust provider being a large bank, then that would
perhaps ensure people's confidence in credit card transactions
and ensure that people follow the codes of practice.
Chairman: I am afraid we are running out of
time. I know there are some of my colleagues who want to ask you
some further questions, but I think you are staying, are you not,
for the rest of this session, in which case people with unanswered
questions, or questions which have not been posed, could have
a word with you afterwards. Thank you very much indeed for your
paper and for your contributions this afternoon.