E-shopping: Trade minister Melanie Johnson

Competition and consumer affairs minister Melanie Johnson joined us live for a forum and answered your questions.

To watch coverage of the forum, select the link below:

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More people than ever are using the internet to do their shopping, but are worried about just how safe it is, according to new research commissioned by the Department of Trade and Industry.

With the Christmas shopping period under way, major virtual shops are expecting big returns.

Amazon last year reported that UK sales over the Christmas period more than doubled from the previous year. The firm dispatched a record 3.2 million items in the UK alone.

But consumers largely remain sceptical about how secure e-shopping is and many are reluctant to provide their personal details.

Are you a regular e-shopper? Do you find it to be a convenient way to purchase goods or are you concerned about the safety of online shopping?

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Transcript:

Newshost:
Chris Bingham-Hunter, England: I'd like to ask Melanie Johnson if she shops online. If so, how does she decide in advance if a virtual shop is going to behave responsibly by delivering the goods within a reasonable time and in good condition - and not abuse her personal and financial details?

Melanie Johnson:
I have shopped online and I do shop online. I think also what he needs to look for is to see whether there are certain safeguards built in before using a site. Our advice to people, in terms of safe use of internet sites, is that they must make sure that they are using a site that they know of, that's been recommended to them or one that's got a Trust UK logo on it, which is quite visible - it says Trust UK. It is a clear indication of the fact that it has been set up in accordance with certain codes which ensure that it's a secure site to use.

Newshost:
He is asking about you personally - you say you use internet shopping. But are there any personal precautions you take?

Melanie Johnson:
One of the things you want to do is to make sure that you use a safe or well known site and that is one of things that I'm doing at the moment as a fairly new internet shopper.

The other thing is that I want to make sure that my credit card details are being protected and there is a little padlock device that comes up which indicates that when you're putting in your credit card details you are protected by the system that the operator is using and that your credit card details therefore won't be going anywhere else. That little padlock sign is a very important protection for the consumer. But also people need to be aware of the fact that if you are using a credit card on the internet, you are protected in just the same way you would be if you were using a credit card in any other way. Fraudulent use of the credit card has to be repaid by the credit card company just as it would do if you used your credit card in any other way.

Newshost:
Hilary Pearson, France: Am I right in thinking that as long as I see that yellow padlock on the website my transactions are safe?

Melanie Johnson:
It is a very strong protection. Obviously you cannot give anybody a 100% guarantee but just as with any other security system there could be people who found their way around them. But, yes that is as good a guarantee as you could ever get. It's as good a guarantee as you are ever going to get - and let's face it, we all hand out our credit card details. We give them out in restaurants, we use them in other contexts all the time and we don't worry in fact about the fact that they're not in a way protected to anything like the same degree as they are on the internet. In fact all evidence is that there's much more credit card fraud off the internet than there is on the internet.

Newshost:
Tony Cuddeford, UK: Will there be any changes to the consumer credit act in order to facilitate on-line credit transactions?

Melanie Johnson:
I am not sure what Tony has got in mind in making that suggestion. But we are looking at reform of the credit legislation at the moment to see what needs to happen to it to review it and update it. We will look of course and see if there's anything we need to do in this way. We have already reformed various legislation to take account of aspects of e-commerce and internet shopping - for example, electronic signatures.

Newshost:
Kyle Gavin, USA: E-shops are very convenient and are great when you know exactly what you want. The trick is to stick with the well-known, reputable sites and the big retailers' own websites. What advice would you have for smaller companies online?

Melanie Johnson:
I think if you are a smaller company one of the things that you need to do is to make sure that your site is actually recognised by one of the main code providers. So that people are aware that it's regulated and go back to Trust UK. Trust UK is a good way of making sure that your internet site is recognised by people as being a safe site to use when they're shopping. If you are a small retailer it is also an ideal way of making sure that you get your wares out to a much wider audience. It may be quite difficult to get them out to a lot of shops or indeed to provide outlets for them through other means. But of course the internet is available so widely and if you put them up there and find ways of marketing yourself then that may be a very good way of getting the message across.

If people want to find out more about using Trust UK, they can find out more through the consumer gateway that we have which is www.consumer.gov.uk which is the DTI's consumer advice site. Both what I am saying about the safe internet shopping and other advice is available on that site.

Newshost:
Phil Thompson, UK As a small business I buy a lot online, but I seldom have anything that the tax authorities would regard as a receipt. Can the Minister undertake to get the Inland Revenue and HM Customs & Excise to accept e-mail receipts and similar for accounting purposes?

Melanie Johnson:
I believe that the tax authorities - both Customs and Inland Revenue - ought to be and indeed are happy to accept the business confirmation slips that people will normally get in the course of transactions like this on the internet. If there are any problems, contact your local Inland Revenue or Customs & Excise office and talk to them about those problems. In the case of any difficulties with Customs & Excise about receipts, if you can't resolve them then do please let me know. My e-mail address is [e-mail] .

Newshost:
The question was that he wanted you to undertake to get the Inland Revenue to accept such receipts.

Melanie Johnson:
I believe they will. My information is that they will. If he's having some local difficulties or if there are other difficulties, please check out first again if there is a problem - if there is a problem then do let us know and we will sort it out.

Newshost:
Dan Sheppard, UK: Many UK citizens are unable to shop online because they are of low financial status, despite them having sufficient funds to perform the transaction. Those ineligible for credit or debit cards find that whilst they may have enough cash, they are unable to buy a product online. How is the Government working to reduce this form of social exclusion?

Melanie Johnson:
First of all let me say that I think it's important - and we recognise that it's important - that some of these new ways of doing things are actually available to a much wider audience than those who may at the moment have credit or debit cards at their disposal. So industry is responding to this and we're working with industry to look at new ways of making sure that others can have access to this.

One of the ways which is already available are a variety of pre-paid cards which you can get and which can be used for this kind of activity - much as people use pre-paid cards for their mobile phone costs. So a similar system exists.

It is also important to recognise that up until recently the only people who can issue so-called e-money - that is this sort of transaction - have actually been the banks and the Government is in the course of changing that and making sure that organisations other than banks - obviously reputable organisations - would also be authorised to do e-money and e-banking facilities.

Newshost:
Doesn't that need a bit of a push?

Melanie Johnson:
We are pushing - that's exactly what we're doing. Various changes need to be made including some changes in legislation and regulation and those things are being done now.

Newshost:
David Lovelace, England: Would the Government ever consider cutting VAT on goods brought online, so as to encourage people to shop online?

Melanie Johnson:
Well I can understand that that might be an attractive suggestion. I am sure there would be lots of competitor suggestions about other routes where we cut VAT as well. I think what we have to be very clear about is that whichever way people buy things then that has to be treated in the same way and it would be wrong for us to give preference to one route over another.

What we are however doing is making sure that people are very well aware of both the availability of the internet for shopping purposes and indeed for commerce - for purposes of business. We are promoting both of those with this campaign. The leaflets that we've got that are going out associated with it which are being made available at the moment through libraries and through Citizens Advice Bureaux as well as the DTI website, which I mentioned a little earlier, on the Consumer Gateway website. But there is a lot of information out there about how to shop safely and how to do business safely on the internet and that's what we want people to be aware of.

Newshost:
Jon Williams, UK: One of the problems with performing transactions via the Internet is that most companies still refuse to treat electronic communication with equal priority to paper. Is there any proposed legislation that would solve this problem? Giving digital signatures equal legal status to paper signatures would be a start.

Melanie Johnson:
We have looked at this - I am concerned to hear that he's having any problems because just last year we changed the law and in fact an electronic signature now has exactly the same legal status as an ordinary traditional signature has. So he ought not to be experiencing any problems of this kind. It is part of what we're doing generally to modernise this aspect of using the internet and to do things electronically to make it more widely available. So we have already made the change on electronic signatures - there are other changes being made now on contracts and on conveyancing and other things electronically that are all in the pipeline. But he shouldn't be having those problems.

Newshost:
James Marson, United Kingdom: The claim is that "consumer rights are the same no matter where a purchase is made." However, is this still true if you're buying from a US or other worldwide retailers. Doesn't the sale then come under US rules?

Melanie Johnson:
There are differences of rules about where your buying things to some degree. Obviously things like the use of your credit card will still be protected no matter where you are. If it is used fraudulently then that will be a matter for the credit card company. But also you do need to look at things like, for example, if you are buying anywhere in the EU, including obviously the UK, you will have 7 days in which you can return goods and not have to make a payment or get your payment back. The fact is that you can't be sure of those same rights wherever you buy things and you do need to check what your rights are in other places. Again, look at places like the CAB website, look again at www.consumer.gov.uk for information and if you're not sure check it out before you take any further steps.

Newshost:
Thomas Burn, UK Do you think it would be a good idea to introduce a well-publicised standard certificate of e-shopping security for e-tailers? Would you welcome e-tailers helping the Government introduce such a scheme?

Melanie Johnson:
I think we've already got something like this. I think the idea is a good one. But we have got something in so far as the Trust UK logo and all the organisations that subscribe to that - some of which provide free registration for people for businesses are actually giving you the opportunity to register to know from the business point of view that you're being protected by being seen by consumers as a safe way of purchasing things. From the consumers' point of view, going into any site that has that kind of protection on it, you know that you are using a properly registered, properly regulated site with the sort of protections on it you would want as a consumer.

We need to make sure that many more people become aware of the fact that the organisations and the systems already exist and subscribe to additional ones because that's the way it's going to be quickest and easiest for people to make sure that they feel confident, as they should do, about shopping on the internet.