Know the rules, regulations of e-commerce

E-commerce has revolutionized the way companies do business, allowing them to reach customers, expand markets, and generate sales anytime, anywhere.

While e-commerce can free a small business from the constraints of a traditional brick-and-mortar storefront, there are still laws and regulations that must be followed. Many laws and regulations have emerged with the growth of e-commerce businesses. E-Commerce laws address consumer concerns about the use of private information, identify theft, and transaction security. Here are some important laws e-retailers should be aware of:

• Fair Credit Reporting Act (FCRA): Despite a small business's best efforts to safeguard and secure its online transaction system, hacking and identity theft remain a serious problems. FCRA spells out rights for victims of identity theft, as well as responsibilities for businesses. For example, identity theft victims are entitled to ask businesses for a copy of transaction records (e.g., invoices, credit applications, account statements.) relating to the theft of their identity.

• Disposal Rule: This was created to safeguard customers' personal information, the disposal rule requires businesses to take appropriate measures to dispose of sensitive information derived from consumer reports. Although the rule gives each business the flexibility to determine the most reasonable method to dispose of the information based on its sensitivity, cost, and changes in technology; a business still remains obligated to take appropriate steps to ensure personal information is not misused.

• Mail or Telephone Order Merchandise Rule: Applicable to online orders as well, this rule spells out the ground rules for making promises about shipments, notifying consumers about unexpected delays, and refunds.

Businesses must have a reasonable basis for stating that a product can be shipped within a certain time, typically 30 days unless clearly specified otherwise. If the deadline can't be met, the business must notify the customer of the delay, provide a revised shipment date, and explain the customer's right to cancel and receive a full and prompt refund. Longer or indefinite delays must have the customer's consent; otherwise, any money must be promptly refunded.

• CAN-SPAM Act: This law applies to any business that uses email to contact customers, even if the business doesn't sell products online. Designed to prevent customers from receiving unwanted messages, the law addresses issues such as false or misleading header and subject information, requires full disclosure of ad content, and requires that recipients can opt-out of any future emails - requests that must be honored promptly.

• California Online Privacy Protection Act: Applicable only to businesses selling to customers in California, CalOPPA requires full disclosure of how the business responds to "Do Not Track" directives. A consumer requests that information about their Internet activity not be used for advertising or other purposes. As California consumer protection laws are often the model for other state-level and federal regulations, laws similar to CalOPPA could well arise elsewhere in the U.S.

More information about rules governing e-commerce and other types of commercial online activity is available via the Federal Trade Commission (www.ftc.gov) and its Bureau of Consumer Protection.

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