Small firms struggle with ecommerce laws

Small businesses are jeopardising their ecommerce operations by failing to adhere to regulations for protecting online consumers.

According to research published this week, over half of UK ecommerce sites do not comply with at least one of the three main laws covering web sales - the Ecommerce Directive, the Data Protection Act and Distance Selling Regulations.

The survey, commissioned by online legal specialist Clickdocs, says that 68 per cent of sites claim to meet data protection rules, but only 18 per cent are registered with the Information Commission. Nearly half of sites do not have a privacy statement and just 37 per cent comply with Distance Selling Regulations.

The laws are designed to ensure that consumers have the same protection shopping online as in the High Street.

Complying with the rules is not expensive, but a lack of awareness and resources can be a problem for smaller firms.

'We tend to find that large companies know the law and tend to comply,' said Jeremy Beale, head of ebusiness at the Confederation of British Industry. 'The difficulty comes in the small companies that don't have the legal resources.'

Simon Stokes, head of ecommerce at law firm Tarlo Lyons, believes non-compliance could be a serious problem.

'Consumer confidence could be damaged if there were some high profile actions where people have suffered a loss as a result of failure to comply, and then it would have an impact,' he said.

Jon Aslin, Clickdocs director, says lack of compliance is particularly damaging for smaller companies.

'If, as a consumer, you stick to the big sites, new sites won't be able to make a go of it,' he said. 'Long term this is quite damaging, you don't want people to stick with big names all the time.'