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The Importance (and Challenge) of Online Consumer Protection

Marta Tellado talks about the state of online consumer protection.

You’ve probably heard the phrase “buyer beware.” It refers to situations where it’s the buyer’s responsibility to make sure the thing they’re buying is safe and isn’t a scam. When it comes to tangible things, there are laws and regulations in place to help protect us. But online, it’s still a “buyer beware” world. The protections we have at the mall or on the street don’t always extend to the internet. But some people are fighting for more online consumer protection to keep us safe.


See Buyer Beware with Marta Tellado for a complete transcript of the Easy Prey podcast episode.

Marta Tellado is the CEO of Consumer Reports, an organization trusted by many consumers to give fair, unbiased evaluations. Consumer Reports has earned that trust over many years, primarily because they’re an independent organization. They are a nonprofit completely supported by members. And unlike a lot of review sites, they don’t accept any advertisements. That means that there’s no financial incentive for them to say something is good if it’s not. In light of all the scams and fraud happening, their mission is more relevant than ever.

What Consumer Reports Does

Consumer reports works to create a fair and safe marketplace for all consumers. Where no standards exist, they work to create them. They do their job by investigating products and areas of concern, educating consumers on making the best possible choices, and advocating for safety measures, laws, and regulations that protect consumers.

We show up when the marketplace fails and when the government fails to protect consumers.

Marta Tellado

Consumer Reports has been around for eighty-seven years, and Marta is proud of some of the things they have been able to do in that time. But there’s a lot of work still left to do, especially around online consumer protection. The world is quickly pivoting to a digital marketplace. A lot of the rules and regulations that protect consumers haven’t migrated to the online space. Scams run rampant, and right now it’s your responsibility to protect yourself. Marta and Consumer Reports, along with thousands of consumers who want better protection, are pioneering a movement for better online consumer protection.

How the Marketplace has Changed

The transition from physical to digital has been a steady stream, and shopping has existed on the internet for a long time. It started with Amazon and books. Now we’ve gone from brick-and-mortar shops to shopping malls to platforms.

Now, the buying experience is not just a transaction to buy something. You’re offered financing, you’re offered a whole way of payments … the whole shopping experience has changed.

Marta Tellado

The entire concept of physical goods has changed, as well. We’ve gone from a cash economy to things like peer-to-peer payment apps. When most of us go into the marketplace, we assume what’s available is safe and not harmful, so we buy things. But in reality, it’s not as safe as we like to assume. That’s why Consumer Reports partners with consumers to keep the searchlight out there and expose what’s dangerous.

Why Marta Cares About Consumer Protection

In many ways, Marta’s story is very similar to others’. Many people come to the United States as immigrants or refugees. Her family came from Cuba, and they had a lot of appreciation for a country that was open, fair, free, and had a variety of opportunities available to them. Like many children of immigrants, who tend to pick up the new language faster than adults do, became an advocate for her parents. She got pretty good at translating back and forth, but many times she ended up in over her head.

If you think about it, all of us at some point enter the marketplace because that’s where we fulfill our aspirations. Maybe that’s a car loan, car insurance, or a mortgage. But the process can be hard to navigate. Marta decided she wanted to give back and make sure everyone had a chance at success and was treated fairly in the marketplace.

A Brush with the Dangers of Online Misinformation

Marta’s dad has been a Type II diabetic for most of his life. He was on the internet, and wasn’t browsing safely. (Since then, Marta has put safety features and tracking protection on his devices). Advertisers identified that he was diabetic, and he started seeing pop-ups with health misinformation. These pop-ups had a person in a white coat that looked like a doctor. They claimed that the medication he was on for his diabetes weren’t effective.

These misinformation techniques were effective. He stopped taking his diabetes medication. Then his health started to spiral, and nobody knew what was wrong. It wasn’t until Marta got the truth out of him that anyone found out he wasn’t taking his medication anymore.

When you’re taken advantage of, your instinct is to be embarrassed and hide from it. That’s the wrong instinct.

Marta Tellado

These people are criminals and fraudsters. And a lack of online consumer protection is what let them track Marta’s dad and convince him to stop taking his medication. If he hadn’t eventually told Marta the truth, he could have died. Mart has seen people lose their entire life savings to online scammers, too. It’s estimated that people lost $8.8 billion dollars to scams in 2022. That’s twice as much as was lost in 2020. Online consumer protection is more needed than ever.

Why We Need Online Consumer Protection

The online experience is not like making a purchase in a physical store. In a physical store, you can look the salesperson in the eye. You can go up to the cash register holding the thing you want to buy and pay for it. The person next to you can buy the same thing and pay for it, and you can see that they did buy it and how much they paid. In the online marketplace, you don’t get any of those cues of authenticity.

We need online consumer protection because the online marketplace has no cues of authenticity that you get in a physical marketplace.

You may get on the online marketplace to buy plane tickets. Depending on your geolocation, the location of your IP address, what cookies are stored in your browser, you may end up paying a different price than someone else trying to book the exact same flight. Is that fair? Marta doesn’t think so. But it is legal. There are no rules or regulations yet about this “dynamic pricing.”

Technology … has transformed our lives in some wonderful ways, but it’s really way ahead of the consumer regulations, protections, and standards that we need.

Marta Tellado

Artificial intelligence is a new challenge. Tools like ChatGPT scrape the internet to find answers. These answers aren’t necessarily accurate. AI can also “hallucinate,” or completely make things up. The problem is that it presents real facts, inaccurate facts, and hallucinations with equal amounts of confidence.

Generative AI also creates new potential for scams. We used to think if we got a phone call and recognized the voice, it’s legitimate. But AI can take snippets of someone’s voice – even from a video they posted online – and can clone a conversation. It has happened. When someone gets you on the phone and it sounds like a loved one in distress, that can be believable and seem authentic.

Improve Your Consumer Awareness

We’ve come to depend on technology. But the tech is racing far ahead of what we can keep up with. And it creates new opportunities for scammers and fraudsters to take advantage of us. While we work towards better online consumer protection, consumer awareness is essential.

It’s important to be conscious for what the red flags of scams and fraud look like. Scams always prey on your emotions, and they always have a good story. They can be something joyful, like you won a great prize. Or they can be something that makes you afraid, or someone claiming to need help. If they pull on these emotions, don’t fall for it.

Let’s face it. Frauds and scams have existed for as long as the marketplace has.

Marta Tellado

You’ve probably been shopping online and gotten a pop-up saying that you should act now because the deal is going away in less than a minute. It’s a tactic – don’t buy it. Don’t trust what you hear on the phone, either. Marta got a call the other day claiming to be from her bank. She asked for the caller’s name and immediately started googling. It turned out to be a legitimate call, but it’s important to verify. Don’t let yourself be scared into doing (or buying) anything.

How Consumer Reports is Helping Consumer Awareness

Consumer Reports devoted their whole July issue to protecting yourself. They provided their best tips for how you should think about and navigate the new world of digital fraud and scams. The digital version is available to the public – you can find it by going to cr.org and looking for the Scam Protection Guide.

When you think about scams, it’s important to think about a lot of different things. You need to be able to prevent money being taken out of your bank account, your personal information from being tracked or stolen, and your identity from being stolen. There are also all the different ways you can get scammed. There are so many different ways you can strengthen your personal security.

Unfortunately, the burden is on the consumer right now. That’s the reality of the situation. But Consumer Reports is trying to help improve consumer power. They fight on behalf of and with consumers for online consumer protection, standards, and to strengthen the “rules of the road.” We have a lot of protections in the physical world. Now we need to see them go digital.

The Online Consumer Protection Standards We Need

In their drive to improve online consumer protection, Consumer Reports has some specific standards and goals that they’re fighting for. These aren’t all that we need in order to be safe online. But Marta thinks these protections are a good place to start.

Better Privacy Protection Online

We still don’t have real online privacy laws. Our information is pretty much fair game. Most of us on the internet are doing risky and dangerous things online without realizing. We’re filling out forms and taking social media quizzes, not realizing these are all schemes to get our information.

Marketing geniuses know how to get your attention, know how to get you to engage and to give up information about yourself.

Marta Tellado

There aren’t actually federal privacy laws that allow us to make companies delete our information. There are laws that allow us to own the information we do have and tell marketers to stop tracking us or selling our data to third parties. But there’s nothing that lets us say, “I don’t want this company to have my information anymore.” Some states have passed great laws protecting their residents’ data. Marta hopes we can get these rights at a federal level as well.

Include Payment Apps in Baking Laws

You’ve probably used a peer-to-peer payment app like Zelle or Venmo. They’re very convenient to quickly and easily send money to someone. But if you make a mistake and send it to the wrong person, that money is gone. There’s no obligation for anyone to make sure you get that money back.

There are banking laws that protect your money if you’re using a bank account or a credit card. But those banking laws don’t yet extend to peer-to-peer payment apps. (That’s one of the reasons scammers love them – if they convince you to send the money, chances are good that you’ll never get it back.) Consumer Reports is working with regulatory agencies to add that protection so you can use those apps with less risk.

If you are using peer-to-peer payment apps in the meantime, Marta has a suggestion: Don’t connect the app to your bank account. Connect it to a credit card instead. Even though there aren’t a lot of protections through the apps themselves, you can get some of the protections on your credit card if that’s where the money came from.

Other Ways to Increase Online Consumer Protection

Consumer Reports is also fighting for fines and penalties that actually make a difference. For some billion-dollar platforms, even a fine of several million is just a cost of doing business, not a deterrent. That has to change if we’re ever going to increase online consumer protection. GDPR in Europe is way ahead of us in the United States in thinking about how to protect consumers. Marta would love to see us think about what privacy and security are worth to us and the cost of cyber crime.

New tech is out there doing all sorts of things. QR codes, for example, can be very useful, but they can also be malicious. Marta has seen cases where people go to an event and come back to a flier on their car that claims they’ve received a ticket and they have to scan a QR code to view the details. But it’s a scam. The tech is out there being used for all kinds of things, good and bad.

The rules and the protections for consumers aren’t keeping up with all this great technology.

Marta Tellado

It’s also important to note that this isn’t the first time we’ve been there. When ATMs were new, there were all sorts of issues with the new technology. But we figured it out. That’s why we have the Electronic Funds Transfer Act. Tech can be used to enhance the buying experience in ways that are protected and secure. That’s what Marta and Consumer Reports want to see.

The Advantage of Consumer Reports

Consumer Reports has a number of tools that they’re able to use to help consumers. One is that they’re able to investigate a variety of things. It’s a way of providing evidence and giving people some agency in deciding what kind of change they want. They have sixty different labs, including an auto test center where they test cars. And they buy everything they test so you know they don’t have a financial incentive.

We’ve got so much information at our fingertips right now, and what we’re lacking is that trust and that guidance.

Marta Tellado

There’s a lot of fake reviews and “sponsored” information out there. Consumer Reports tries to help you figure out what you should be looking for and give tips to make a good decision, especially on big-ticket items. They combine investigations, ratings, reviews, and testing to become a powerful voice for consumers in the marketplace.

Consumer Reports uses their investigations, ratings, reviews, and testing to become a voice for the consumer in a world without online consumer protection.

We’ve seen more and more concentration in the marketplace. Company power is oversized compared to what consumers can press on them. Consumer Reports is trying to help consumers take some of that power back.

The Power of the Consumer

Consumers, it’s supply and demand. We need to demand some things.

Marta Tellado

Safety features in cars is one example of how consumer demand can move a marketplace. Sometimes it takes a long time to get standards and laws in place. In the interim, consumers are suffering, especially when it’s a safety issue.

There’s some amazing technology in cars right now, like blind spot warnings and pedestrian alerts. We have research that these features save lives. But some of that is still considered a “luxury,” not a standard feature. Think about that – your safety and the lives of your family is an add-on luxury instead of something in demand.

Consumer Reports told manufacturers that if they didn’t have these lifesaving technologies in their vehicles, they won’t be put in the Top 10 category. And suddenly, there started to be movement. More manufacturers included this tech as a standard feature. They wanted consumers to know they were going to be safe if they bought their cars. It’s just a way where working en masse could see markets change.

The Power of the Consumer Online

Marta hopes the same thing that happened with car safety can happen around digital tools. As consumers, we have to rise up and say we want a digital world we can trust. Online, we can’t see what’s protecting our identities or our money. That’s why online consumer protection is so essential.

In the meantime, the burden is still on us. But Consumer Reports don’t want you to be unprotected in the interim. That’s why they have the Scam Protection Guide. It’s also why they created a tool called the Security Planner, which you can access at securityplanner.consumerreports.org. The Security Planner helps you go through all your devices and maximize them for security and data safety. Marta invites everyone to go through it.

Online Safety Tips for Consumers

You’re going to have to take matters into your own hands for the time being.

Marta Tellado

Watch out for red flags and be suspicious of anything that plays on your emotions. Scammers and fraudsters love to tug on your heartstrings. Make sure your devices are secure and you have optimal privacy and minimal tracking on your devices. If you get hacked or your info is exposed in a data breach, freeze your credit immediately. And go through the Security Planner and look at the Seven Smart Security Steps in the Scam Protection Guide for additional tips.

You can also protect yourself by challenging people in a reasonable way. Does this restaurant really need your birthday to let you order a pizza? Does your dentist really need this information to clean your teeth? If you get in a mindset of only giving out what’s required for the service that you need, you can protect your information better.

Online consumer protection is, unfortunately, your own responsibility right now. It’s important to have that awareness and be a little suspicious online right now. Cast a little bit of side eye and verify as much as you can until we can impress on regulators and businesses that putting consumers first is a good thing.

See all of Consumer Reports’ reviews, reports, and ratings at cr.org. Check out their Scam Protection Guide by going to cr.org and searching “Scam Protection Guide,” and go through the Security Planner at securityplanner.consumerreports.org.

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