Council report finds Canadian consumers feel cautious about using online reviews of products and services used by other consumers, but nonetheless feel information from this source if carefully considered makes them more savvy shoppers.
Canadian consumers feel cautious about using online reviews of products and services used by other consumers, but nonetheless feel information from this source if carefully considered makes them more savvy shoppers, according to a Consumers Council of Canada research report.
Consumers appear to rely on the most unreliable method of all for judging the trustworthiness of individual consumer reviews -- 'gut feel.' However, consumers are not particularly satisfied to rely on their intuition about reviews, and believe review sites on the Internet need to do a good job of offering features that help them understand and compare reviews and reviewers, sort and sift reviews to read ones that are more or less positive, evaluate reviews and reviewers against their own needs and personal life contexts.
Consumers and experts consulted by the Council’s researchers say online review sites contain many false reviews, created for many reasons, including businesses seeking advantage, friends helping friends, employees supporting employers, and consumers getting even.
"When business or consumers are not honest in their reasons for writing a review they harm us all," said Consumers Council of Canada President Don Mercer. "A review does not need to be perfectly accurate to be of value to the marketplace. It does need to be honestly offered."
A variety of business models have arisen for services providing online consumer reviews, and each presents risk and benefits to consumers, depending on different potential sources of conflict of interest, which if unmanaged, can adversely affect the moderation of review content on sites, leading consumers to be misled, the research found.
Gaps in critical thinking skills or access to online consumer reviews can disadvantage some consumers, because consumers increasingly have turned to the Internet for information to support buying decisions about products and services.
Traditional sources of expert reviews, such as paid circulation magazines, appear, consumers say, to be disappearing, partly because they face competition from ‘free’ online consumer review sites. Many consumers say they favour expert reviews as part of their decision-making process. However, individual buyers sometimes find consumer reviewers who use products and services in ways similar to their own uses, leading to unique insights not provided by expert reviewers.
"Consumer online reviews, when enough of them are available and considered ahead of a purchase, can help a consumer," said Mercer. "But one review on its own should be taken with a grain of salt.
"Take care not to use a review to justify, rather than inform, a buying decision. A review may be found to fit almost any pre-conceived notion."
The research found sites that offer consumer reviews may have very different objectives in offering them, depending on how site owners define their objectives to make money.
"In some contexts, reviews, regardless of authorship, should be considered 'advertising' subject to the regulatory expectations of advertising," said Mercer. "In other cases, reviews may just be 'fair comment,' much as opinions appear in review sections or letters pages of newspapers."
Consumers have a difficult time identifying the motives and business models of review sites. The report recommends greater transparency concerning review site business models, so users can come to better-informed conclusions about a site's utility and reliability for their purpose.
The Council's report contains many more recommendations about how to improve protection of consumers in the rapidly growing online consumer reviews industry.
The Consumers Council of Canada has received funding from Innovation, Science and Economic Development’s (ISED) Contributions Program for Non-profit Consumer and Voluntary Organizations. The views expressed in the Council’s report are not necessarily those of ISED or the Government of Canada.
Consumer group Option consommateurs is releasing a video series on YouTube called "A Moment of Privacy".
“The Connected Car", features Philippa Lawson, a privacy lawyer. This video is based on a research published by the BC Freedom of Information and Privacy Association (FIPA).
"Fitness Trackers" features Andrew Hilts, from Open Effect.
"Young Canadians and Privacy" features Matthew Johnson, from MediaSmarts
This four-video series seeks to popularize results from some of the privacy research projects made possible by the Contributions Program from the Office of the Privacy Commissioner of Canada. The video gives the opportunity to researchers that published a study on privacy in the last few years, to explain, in simple terms, some of the results of their study.
Still to come, OC will offer a video on:
The protection of Canadian data in the cloud (with Heidi Bohaker, associate professor at the University of Toronto)
The review by the Canadian Radio-television and Telecommunications Commission of the structure and mandate of the Commissioner for Complaints for Telecommunications Services, which provides dispute resolution for Canadian retail consumers of telecommunications and soon television services, supported many positions taken by the Consumers Council of Canada in recent hearings.
The CRTC decision prompts CCTS to:
Act more boldly to monitor and enforce dispute resolution resulting from telecommunications service providers’ conduct and promote the service CCTS can provide consumers.
Note in its annual report those service providers who don’t follow the rules by making their customers aware dispute resolution can be obtained through CCTS.
Make public its budget in its annual report, which would help the public ascertain how CCTS spends its money doing its job.
Promptly provide to the CRTC the results of a study of public awareness of CCTS that CCTS agreed to conduct.
The CRTC expanded CCTS’s mandate to include addressing complaints related to the provision of subscription television services provided by a television service provider, a step the Council has supported. All licensed TV providers must participate in CCTS by September 2017.
“By giving CCTS responsibility for resolving disputes with both television service providers and telecommunications service providers, CCTS should be able to become more efficient and better known by the public,” said Howard Deane, who represents the Council concerning issues before the CRTC.
“When CCTS gets customer problems to solve, it frequently solves them,” he said. “So, the CRTC very appropriately directed CCTS to enforce upon telecommunications service providers, and now television service providers, their obligation to inform their customers that CCTS exists to help them with their problem — in general and especially when involved in a dispute.”
The Council is one of the consumer groups nationally that nominates two persons to serve among the four ‘independent directors’ on CCTS’s board.
At the moment, the Council is conducting an online one-question survey for Canadian consumers about their awareness and/or use of CCTS’s service. Consumers can answer the question on the Council’s homepage at: http://www.consumerscouncil.com
A new report by the Consumers Council of Canada cautions that overly complex privacy and terms and conditions statements can put Canadian consumers and businesses at significant legal risk and undermine the trust between customers and online businesses.
This comprehensive study, funded by the .CA Community Investment Program, included qualitative reviews of online terms and conditions statements, interviews with experts, as well as a survey of Canadian Internet users.
"We believe enlightened companies will see these recommendations as a way to reduce their own business risk and strengthen trusted relationships with their customers," said Howard Deane, who authored the report for the Consumers Council of Canada.
A large number of consumers do not read or understand the terms and conditions statements that they agree to. Consumers cite the complexity and length of these statements as core to their decision to ignore them. Statements often have one-sided wording, leaving consumers with little choice but to accept.
Most consumers are at risk due to misunderstanding online terms and conditions statements and the liabilities they assume, including privacy risks. Misunderstood agreements could find their legal standing challenged by consumers.
Complex terms and conditions statements may undermine the trust between consumers and businesses and consumers report feeling that companies with complex terms and conditions do not have their best interests in mind. The report cautions that businesses are undermining their relationships with their customers and that rights-consciousness among consumers is growing.
The Consumers Council of Canada has made 12 key recommendations, from including plain language summaries, to allowing consumers to print, email and save agreements, to writing headlines and tables of contents in the “consumer voice” to facilitate understanding.
The Consumers Council of Canada pointed to the Canadian e-commerce company Shopify as showing awareness of the need for consumer-friendly terms and conditions statement. The company includes both a full legal text, but also a plain language summary of the terms, with easy-to-understand reviews of changes.
"The Consumers Council of Canada is pleased to be able to engage the important public discussion about better ways to reach agreement online," said Aubrey LeBlanc, President, Consumers Council of Canada. "The Council respects the commitment CIRA showed to a safer more prosperous Internet for all by financially supporting the research project leading to the guide. The views in the guide are ours, not theirs. But we share with them the commitment to make the Internet a great ‘place’ for consumers."
David Fowler, director of marketing and communications for the .CA Community Investment Program, said: “Trust and confidence is absolutely critical to electronic commerce and this practice of companies using long, complex, and poorly-understood terms and conditions statements has the potential to undermine these important commercial relationships. With so much at stake for the growth and development of e-commerce, it’s critical that businesses come to terms with this issue and communicate with their customers in ways they can understand.”
About .CA and the Community Investment Program
Through the Community Investment Program, .CA funds projects that demonstrate the capacity to improve the Internet for all Canadians. The .CA team manages Canada’s country code top-level domain on behalf of all Canadians. A Member-driven organization, .CA represents the interests of Canada’s Internet community internationally.
TORONTO – Canadians seeking to find sources of payday loans or arrange a payday loan online over the Internet are more likely to encounter unlicensed lenders than a licensed compliant lender, according to a research study by the Consumers Council of Canada.
A number of unlicensed lenders request that borrowers provide personal banking information -- account numbers, online passwords and answers to security questions -- that would provide direct access to the borrower's bank account. Many also claim to be compliant with all the requirements of legislation, but clearly are not in compliance.
The study evaluated payday loans websites from the consumer perspective in each of Canada's provinces and the Yukon Territory. Researchers used common searches to identify providers, and completed applications up to the point of acceptance. Sites were evaluated on more than 50 different criteria, most importantly whether they were licensed to provide payday loans to residents of that specific province. (Six Canadian provinces have functioning laws that govern the industry; two others have passed laws that have yet to take effect.) The growing threat posed by unlicensed lenders has been the focus of recent provincial reviews in Manitoba, Ontario and Nova Scotia.
Other key findings from the Consumers Council of Canada study:
To the extent the research could determine, licensed lenders show a high level of compliance with regulations, while unlicensed lenders show virtually no compliance with regulations.
In provinces without regulation, consumers who seek a payday loan online are likely to encounter only the least compliant and least consumer-friendly lenders.
For consumers in most provinces, unlicensed lenders have the dominant presence in the online marketplace. Consumers are much more likely to encounter unlicensed lenders, and until they encounter a licensed one, may not even be aware of their province’s licensing requirements.
Many unlicensed lenders use paid search advertising to promote their services to online consumers.
"As the payday loan industry increasingly moves online, consumers need to avoid additional risks that come from contracting with unlicensed lenders, particularly those that seek direct access to a borrower's bank account," said Consumers Council of Canada President Aubrey LeBlanc: "Payday loan customers take on new, extraordinarily high costs to meet short-term financial needs. A consumer who finds themselves repeatedly using a payday loan within a year should consider this a signal to obtain good quality, trusted credit counselling and other advice about how to manage their financial future."
The Council’s report includes a number of recommendations to improve consumer protection in the industry.
The Consumers Council of Canada has received funding from Industry Canada’s Contributions Program for Non-profit Consumer and Voluntary Organizations. The views expressed in the Council’s report are not necessarily those of Industry Canada or the Government of Canada.