Consumer Protection and Transparency on the Web: Finally a Reality?

When Susan Fawley decided to look for a mortgage refinance online, she had no idea how challenging it would be to find information she could trust. “I had gained a lot of equity in my home and knew that I could refinance and pay off higher debts, but I didn’t know where my information would be safe and where I would get the best lending advice.” Susan’s dilemma is not dissimilar to millions of web surfers who are finding a difficult time navigating through the myriad of sites in the new Internet, or Web2.0. “A lot of sites looked like they were primarily running advertisements from other sites, and I wasn’t sure if my personal information would be protected.”

There is hardly a doubt that the Internet is growing faster than it can be effectively organized or monitored. According to Internet Systems Consortium, there are more than 400 million website domains on the Internet today with more than 5 million new domains each month. User generated content and the blogosphere have together created a new accelerator to Internet growth. According to Technorati, 26 million bloggers have created 35.3 million weblogs and are creating another 75,000 new weblogs each day.

David Bayer, President of PersonalHomeLoanMortgages.com says “While the Internet is a great medium for business, the intended use is to make information more readily available. When borrowers come to our site, they’re free to do the leg work themselves, or they can leverage the relationships we’ve established with pre-approved lenders from their local area; all the information to Borrow Intelligently is there.”

Sites like www.PersonalHomeLoanMortgages.com are one of several Web2.0 websites which provide consumers with as much information as possible, even if it means that consumers contact lenders directly rather than applying online. Leveraging the hype of the Blogosphere, the company allows borrowers and lenders to interact with one another to exchange tips, information and establish direct relationships. “Personal information should be protected at all costs, and informing customers that our handling of their information is in line with Do-Not-Call, Can-Spam and other FTC and best practices standards has had a significant impact on our customers’ willingness to engage us directly” commented Mr. Bayer.

Consumers are becoming savvier with their time and money, aware now of crooked pitfalls that riddle the web. According to Clickz’ December 2005 report, more than half of online retailers still do not have the necessary protocols to handle security issues. While buyers have begun to look for security qualifications to prevent spam and identity theft, fraud is on the rise. According to the National Fraud Information Center, internet fraud resulted in a loss of more than $13 million in 2005 with auction & e-commerce representing more than 70% of the losses. This call for consumer protection has created a fertile environment for companies such as TRUSTe and the Better Business Bureau, whose membership value has increased as consumers look for their official stamps of approval. TRUSTe is an independent, nonprofit organization that certifies and monitors web site privacy and email policies.

How Web2.0 incorporates consumer protection and open information will undoubtedly have an impact on overall consumer spending on the web. With online retail expected to exceed $200 Billion this year alone, a 20% gain over 2005, continued growth, particularly at this rate, will require an investment by the web business community as a whole to contain another rapidly growing statistic – consumer fraud and losses on the web.

Drew Wolfe is an independent media analyst specializing in Web2.0 media metrics & consumer protection legislative policies. Mr. Wolfe can be reached at bizperience@gmail.com