By: Marie Innarelli
With the store closures brought on by the COVID-19 pandemic, online shopping is more popular than ever. Less money allocated to dining at restaurants and increased time spent in the home created the perfect storm for a spike in e-commerce. The top online retailers experienced a traffic increase of 125% between March-June of 2020 as compared to 2019. To keep with the status quo, businesses that previously did not offer online sales are developing websites to keep their business afloat. While the increased convenience of choosing the things you want to buy without the hassle of going to the store may seem ideal, it does not come without potential harms to consumers. This drastic increase in online shopping brings increased security risks as more online retailers now possess the personal data of consumers who are particularly vulnerable to misleading and deceptive marketing techniques due to the uncertainty brought on by the COVID-19 pandemic.
While there is no national legislation on protecting consumer privacy within e-commerce specifically, the Federal Trade Commission (“FTC”) along with policies like Restore Online Shoppers’ Confidence Act (“ROSCA”), the Online Privacy Protection Act, and the Telemarketing and Consumer Fraud and Abuse Prevention Act work to protect consumers from exploitation. ROSCA devotes the most attention to online shopping as it regulates data pass which protects the personal information you provide to retailers when making a purchase.
The FTC was created in 1914 with its primary purpose being to regulate competition in commerce and protect consumers. To protect consumers, the FTC penalizes people and businesses that violate the law as well as educate consumers about their rights. The FTC pioneered statutes like the Federal Trade Commission Act and Economic Growth, Regulatory Relief, and Consumer Protection Act (among many others) to ensure consumers in the United States are protected from violations. Regarding state law, California offers the greatest protections of a consumer’s right to security and privacy. The California Online Privacy Protection Act of 2003 requires websites and online services that collect the personal information of consumers to post a privacy policy on their website that they comply with.
The FTC published guides and videos on avoiding “Coronavirus Scams” as well as data on complaints from consumers in relation to the pandemic. Largely, they warn consumers of robocalls being used to illegally access your personal information, phishing emails, and fraudulent means of coercing donations.
The most significant risk to consumers during the COVID-19 pandemic is sellers using the fear and uncertainty of individuals as a weapon for manipulation and coercion. As a result of the unusual circumstances, consumers are more apt to believe ads and campaigns they normally would not. For instance, if a consumer receives an email about an at-home coronavirus testing kit, or donating to families devastated by the pandemic they are far more likely to believe it now compared to the time pre-pandemic. E-commerce is benefitting off of the vulnerability of consumers. While in some cases it is perfectly legal and even inevitable that with most Americans trapped at home there are going to be higher rates of internet traffic it is not legal to use this increased traffic to mislead and harm consumers.
To combat this very real threat to consumer rights, the FTC published guides and videos on avoiding “Coronavirus Scams”. Mainly, they discourage consumers from responding to correspondence regarding checks from the government, believing offers for coronavirus vaccinations or home test kits, and answering robocalls. They are also offering information tailored to different kinds of consumers, children, college students, grandparents, etc. The Organisation for Economic Co-operation and Development, of which the United States is a member, is encouraging governments to establish a dialogue with online businesses about scams and misleading conduct, collaborate between agencies, and avoid rolling back consumer protection at all costs. Additionally, chief information security officers of major companies increased their budgets to prevent network threats brought on by the surge in online shopping during pandemic lockdowns.
Prevention is better than cure. In other words, education on consumer rights and increased budgets for cybersecurity are the easiest ways to safeguard consumers from e-commerce privacy violations. If companies continue to invest in protecting their consumers and if consumers take the time to educate themselves through sources like the FTC and OECD to become aware of their rights, they are less likely to be taken advantage of during this time of uncertainty where consumer risks are at an all-time high.
Student Bio: Marie Innarelli is a second-year law student at Suffolk University Law School and serves as a staff member on the Journal of High Technology Law. Marie holds a Bachelor of Arts in History from Hobart & William Smith Colleges.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
