Code Provides Helpful Guidelines for Merchants to Make Online Shopping a Positive Experience

ARLINGTON, VA., October 24, 2000 - The Better Business Bureau system and BBBOnLine today released the latest in its widely-heralded initiatives to promote consumer trust on the Internet: the BBB Code of Online Business Practices. Encouraged by government officials and regulators, businesses of all sizes, and consumer organizations, in the U.S. and other countries, the premiere business self-regulatory organization has developed a roadmap for businesses to foster safe, successful e-commerce.

"The BBB Code of Online Business Practices is designed to guide ethical 'business to customer' conduct in domestic, as well as cross-border e-commerce transactions. Already being used as a model in Europe and elsewhere, the Code provides desirable standards that, when adopted by online merchants and advertisers, are expected to make a significant contribution toward effective self-regulation in the public interest," said Calvin J. Collier, senior vice president and general counsel/corporate affairs, Kraft Foods, Inc., and chair of the Council of Better Business Bureaus (CBBB), the umbrella organization for the 130 BBBs in the United States and Puerto Rico. Another 15 BBBs serve Canada.

Collier noted that new and inexperienced online merchants and advertisers, as well as long-established, international corporations, like Kraft, will find the newest BBB Code to be a useful tool in boosting consumer trust and confidence in online commerce.

"Studies have shown that e-commerce shoppers have concerns regarding the security and safety of shopping online. The BBB Code addresses these concerns and more. By adopting the BBB Code of Online Business Practices as their own, online businesses will help ensure their customers have a positive shopping experience."

Business and advertising self-regulation is a hallmark of the BBB system as evidenced by the effectiveness of the CBBB's National Advertising Division (NAD), Children's Advertising Review Unit (CARU), and the BBB Code of Advertising, which has guided advertisers in the traditional marketplace for decades.

The newest online code is the culmination of a yearlong, inclusive process by the BBB and its BBBOnLine subsidiary to solicit input from all segments of the e-marketplace through regional meetings, web site postings, conferences and public outreach. More than 1,000 comments were received from business, consumer, BBB and government representatives, in the U.S. and abroad.

Mozelle W. Thompson, a commissioner of the U.S. Federal Trade Commission, has stated that "The Commission is active in providing baseline standards to protect consumers through law enforcement efforts and other activities. Accordingly, I welcome the BBB's initiative to give businesses the tools to provide confidence to consumers shopping online."

The European Community is expected to be equally supportive. "The BBB is on the front line, helping to provide the self-regulation, standards-setting, trustmark and dispute resolution programs that are proving to be valuable models for e-commerce. We encourage the BBB system to build partnerships that will serve all of our countries by encouraging businesses everywhere to adopt principles consistent with the BBB Code of Online Business Practices," said Gerard DeGraaf, Trade Counselor of the European Union's Delegation to the United States.

Five basic principles drive the BBB Code of Online Business Practices:

• Truthful and Accurate Communications: Online advertisers should not engage in deceptive or misleading practices with regard to any aspect of electronic commerce, including advertising, marketing, or in their use of technology.

• Disclosure: Online merchants should disclose to their customers and prospective customers information about the business, the goods or services available for purchase online, and the transaction itself.

• Information Practices and Security: Online advertisers should adopt information practices that treat customers' personal information with care. They should post and adhere to a privacy policy based on fair information principles, take appropriate measures to provide adequate security, and respect consumers' preferences regarding unsolicited email.

• Customer Satisfaction: Online merchants should seek to ensure their customers are satisfied by honoring their representations, answering questions, and resolving customer complaints and disputes in a timely and responsive manner.

• Protecting Children: If online advertisers target children under the age of 13, they should take special care to protect them by recognizing children's developing cognitive abilities. Specifically, they should adhere to the CARU Self-Regulatory Guidelines for Children's Advertising.

The BBB Code provides businesses that wish to implement the more general guidelines recently recommended by the Electronic Commerce and Consumer Protection Group (ECCPG) a practical roadmap for doing so. The E-Commerce Group, which includes America Online, AT&T, Dell Computer Corporation, IBM, Microsoft, Network Solutions, Time Warner Inc., Visa U.S.A. Inc., and American Express, issued guidelines for merchant-to-consumer transactions in June 2000. The BBB Code is consistent with the ECCPG guidelines, and provides businesses with an immediate means and dispute resolution mechanism to implement the guidelines.

Ronald L. Plesser, a Washington lawyer with the firm of Piper, & Marbury Rudnick & Wolfe, who coordinated the work of the ECCPG, said "we applaud the work of the BBB and BBBOnLine for providing the business community with detailed standards for implementing the sort of good business practices that we have encouraged with the release of our own guidelines just a few months ago.

"We encourage online businesses to participate in the BBB's trustmark and alternative dispute resolution programs. We intend to work with the BBB to help establish partnerships with organizations throughout the world so that trustmarks, codes of conduct, and dispute resolution mechanisms will be effective for online businesses and consumers," Plesser added.

The BBB's new Code supports the two BBBOnLine trustmark programs, which continue to grow in size and stature. BBBOnLine Reliability, the largest trustmark program on the 'Net, currently covers more than 8,600 web sites, signifying merchant adherence to specific marketplace standards. Reliability seal participants will have about a year in which to come into compliance with the new BBB Code of Online Business Practices. The BBBOnLine Privacy seal, awarded to 675 web sites, indicates adherence to the privacy principle outlined in the new BBB Code and other privacy protection standards, and already transcends national borders, with applications pending from businesses in 20 countries.

"We invite businesses engaged in e-commerce to join with BBBOnLine Founding Sponsors and the CBBB Board of Directors in support of high standards of conduct to serve this newest marketplace, beginning with this holiday shopping season," said Ken Hunter, president and CEO of the Council of Better Business Bureaus.

Hunter noted that holiday shopping was frustrating for many online shoppers last year as they attempted to navigate through web sites that failed to adequately support a satisfactory shopping experience. "The BBB's new Code gives online businesses a tool they can use this year to not only meet, but exceed customer expectations," he said.

[To serve the international marketplace, the BBB Code will be available in several languages, beginning with Spanish, French and German. To view a copy of the entire Code or for additional information about BBB online initiatives, visit www.bbbonline.org]

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The Council of Better Business Bureaus is supported by the memberships of 300 leading-edge national corporations, and local BBBs in the United States and Puerto Rico. Another 18 global companies, pioneers and leaders in e-commerce are BBBOnLine Founding Sponsors, including America Online, Ameritech, AT&T Corp., Bank of America, Dun & Bradstreet, Eastman Kodak Company, GTE, Hewlett-Packard Company, IBM Corporation, Intel Corporation, Microsoft Corporation, The Procter & Gamble Company, Reed Elsevier Inc., Road Runner, Sony Electronics, U S WEST, VISA and Xerox Corporation.