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Peer problems

25 June 2015

An assessment of the consumer experience of online marketplaces

In Peer problems: An assessment of the consumer experience of online marketplaces [ 1.1 mb] we present the first assessment of consumer protection in online marketplaces, based on the results of independent polling and new analysis of data from our own Consumer Helpline.

A defining challenge in consumer protection is keeping up with the rapid pace of change. Nowhere is this harder than in markets that are being transformed by the shift online. Three quarters of adults in the UK bought or sold goods and services on the internet in 2014, a 21 percentage point rise on 2008.

These changes are overwhelmingly positive, enhancing choice and competition. But at Citizens Advice we also see their sharp end as consumer scams migrate online along with the wider consumer economy.

The rise of online trading creates new ways to carry out old scams. But it also raises more fundamental challenges for consumer protection.

One particular challenge comes from online marketplaces - websites like eBay, Amazon Marketplace or Gumtree, that don’t sell goods directly, but act as an intermediary, allowing people to trade with each other.

Consumer law was simply not designed for this world; most consumer rights do not even apply when individuals buy from other private individuals. If this used to be a niche concern, it is not any longer. eBay alone now has a digital audience of 27 million, making it the UK’s leading retail website.

In Peer problems, we start from the premise that these websites offer huge benefits to consumers. The question is how to ensure consumers remain protected while not undermining these advantages or hindering their growth.