e business and Consumer Protection

Statutory Functions

The Isle of Man Office of Fair Trading is a Statutory Board of Government that provides appropriate consumer protection legislation, advice and compliance services that benefits and protects the Island’s consumers and businesses from unfair trading practices.

The remit of the Office can be found in Section 57 of the Consumer Protection Act 1991 which states: "the function of the Board (the Office) is to protect, inform, advise and represent generally the interests of consumers as such, and to provide information and advice to persons on legislation for which it is responsible."

The first part of the remit in respect of "protect, inform, advise and represent" is obviously aimed at consumers and is achieved through the making of legislation and its enforcement together with the provision of literature on consumer rights and direct consumer advice.

The last part of the remit is not restricted to consumers and enables the Office to provide information and advice to businesses and greater emphasis is now being placed on this role than ever before and forms a significant element of our Compliance Policy which is detailed below.

Furthermore, the Office encourages businesses to seek advice on consumer protection legislation from our compliance team and promotes this service through the provision of publications, media releases, direct contact during compliance visits and consultation with trade bodies and development agencies.

General Policy

Although not obliged to follow EU or UK legislation there has been a long standing policy that local consumers should be afforded at least the same level of protection as that enjoyed by consumers in neighbouring jurisdictions. Equally it is important that there are no significant barriers to businesses wishing to trade in or from the Island and so a certain level of equivalency is advantageous in attracting those businesses to the Island. During 2001 the Office introduced a Fair Trading (Amendment) Act which incorporated controls on pyramid selling, distance selling, unfair contract terms, doorstep trading, inertia selling and introduced of an Ombudsman Scheme for financial services.

It is the belief of the Office that appropriate legislation is necessary to protect local businesses from unfair competition and is essential to protect the good name and reputation of the Island around the world which would be damaged if the Island was used as a haven by those seeking to avoid such internationally accepted legislation. A reputation for quality and excellence is a hard-won resource that must be protected and the Office plays a significant role along with other regulators in making the Island an attractive place to do quality business.

Compliance Policy

Although many of the statutes enforced by the Office contain criminal sanctions it is our aim to achieve compliance initially through the provision of advice and information. In the majority of cases where there is no intentional fraud or reckless safety issues involved businesses found in breach of any legislation will be given formal warnings and only subsequent breaches will result in criminal proceedings being instituted. Where businesses refuse to accept the advice given or are shown to wilfully or recklessly breach any legislation the Office will not hesitate to use the full force of the law to achieve compliance and protect both the consumer and the reputable business. The Office endeavours to make compliance visits to all high risk businesses that are subject to consumer protection legislation. Risk assessments are based on such matters as the product type, throughput and previous trading behaviour.

Due diligence defences against conviction are provided in almost all consumer protection legislation and our officers will readily assist business compliance officers in developing the necessary systems.

e business (B2C)

As with conventional retail trading the Office welcomes the opportunity to support businesses involved in e business through the provision of information and advice on compliance and related issues. In general terms e business is treated in exactly the same way as any other business and the policies detailed above will be applied to on-line businesses as they would be to those with physical premises.

In particular the introduction of the Fair Trading (Amendment) Act 2001 covers distance selling which will impact on mail order, telephone sales and of course e business. Most mail order businesses already apply many of the principles found in the legislation and fair competition requires that e businesses should also comply with what are generally accepted to be world standards. It is hoped that the introduction of the legislation will deter any disreputable businesses from setting up in the Island.

An annual inspection sweep of internet based businesses on the Island is carried out to determine the scale of the industry and assess whether basic trading standards are being met in relation to licensing requirements, advertising, credit, trade marks and other business practices. Where necessary test purchases of the goods or services offered will be made to check the accuracy of the advertising or authenticity of the trade mark and if deficiencies are found the officers would provide the necessary advice and information in order to assist the e-business achieve compliance. We also support international efforts to police the internet and participate in the "Annual Internet Sweep" in association with the International Consumer Protection Enforcement Network (ICPEN) which is a network of enforcement agencies from 30 OECD countries including the UK's Office of Fair Trading. Previous years' sweeps involved checking web-sites for compliance with the OECD guidelines which suggest that the sites should include such matters as physical addresses and contact details other than e-mail, full disclosure of costing's including freight and a returns policy statement. We believe local sites compared favourably with those based in the UK and elsewhere.

The Office is keen to support the development of e business and has developed excellent working relationships with the Department of Trade and Industry and the e business Director which will ease the way for "start ups" and assist established e-businesses to grow.

For further information please see the Office of Fair Trading website at www.gov.im/oft.