|
Consumer Protection Issues and
Electronic Networks
By Mark C. Del Bianco
New electronic
technologies and networks are ubiquitous in most attorneys’
professional and personal lives, and unlike most areas of the law the
consumer protection issues raised by electronic networks affect
attorneys just as much as their clients.
Many of these
issues are not new, simply being amplifications of existing consumer
protection problems. For example, everyone is now aware of identity
theft, which occurs when a criminal obtains your personal information
and uses it without your knowledge to commit fraud or theft. Identity
theft is a serious crime; victims suffer credit destruction, lost job
opportunities and even arrest for crimes that they did not commit. In
most cases, little recourse will be available to a victim of identity
theft, and the best that can be hoped for is to minimize the damage to
the victim.
There is no
question that sending personal information online can create the
potential for identity theft. But the danger is much less than the
publicity given the issue would suggest, especially now that most
online shopping sites are incorporating sophisticated encryption
techniques. The 2,352 complaints of Internet-related identity theft
reported to the FTC in 2002 were only a fraction of the 165,000
non-Internet-related cases reported during the same period.
Viruses, trojan
horses and other software programs that sabotage the operation of
computers and networks pose a far more broad risk to consumer
protection. The sabotage can take the form of data destruction,
slowing down or halting a computer’s operation or hijacking a computer
and using it to attack other computers on the Internet, such as in a
denial of service attack. Viruses and worms can also affect consumers
indirectly by disrupting the transmission networks or the computers of
government agencies, businesses or others with whom consumers seek to
conduct transactions.
There is only a
minimal chance of recovery for any damage done by a virus. There is
little possibility of holding the creator of the virus liable, even if
he or she can ever be identified. Insurance cannot replace lost data.
It rarely covers the loss of business income due to a virus; at best,
it may compensate for actual out-of-pocket costs involved in getting
the system back up and running. Finally, Microsoft and other creators
of widely-used software programs have to date successfully avoided any
liability for security holes in their software that allow viruses and
worms to enter and wreak havoc. This state of affairs may change in
the near future, however, as state legislatures and/or courts may
decide to impose a standard requiring a reasonable level of security
or imperviousness to hacking.
Recognition is
also growing about the use and dangers of spyware, which is any
software that helps gather information about a person or organization
without their knowledge. Some spyware, such as that used by
corporations to monitor worker productivity, is deliberately installed
on an organization’s computers by management and raises privacy and
employment relations issues rather than consumer protection issues. A
more dangerous form of spyware invades a computer system without the
operator’s knowledge, tracks users’ keystrokes and then delivers that
data back to an outside party. Recorded keystrokes can, for example,
give a spyware author access to personal and corporate passwords,
credit card numbers, e-mails and other sensitive documents. This type
of spyware is far more prevalent than is widely understood and it is
often introduced into consumers’ and businesses’ computers through
peer-to-peer (“P2P”) file-sharing programs. Most users do not realize
that they may be inadvertently exposing sensitive personal or business
information on their computer when they use a P2P program. For
example, staffers on the House of Representatives Government Reform
Committee recently announced that using one widely-used P2P program
they were able to easily find and download federal tax forms,
attorney-client correspondence, internal business documents,
government office correspondence, medical records, personal letters
and e-mails from consumers’ computers. The implications of such
inadvertent disclosure for an attorney could be extremely serious,
raising such concerns as potential waiver of the attorney-client
privilege, disclosure of confidential client information and even
potential exposure to malpractice claims.
The FTC
reported earlier this year that the most common Internet-related
complaint is auction fraud. Some is just a variation on old-fashioned
mail fraud. For example, most online cases involve failure to deliver
advertised goods after buyers pay for them. But the rise of ecommerce
- and particularly online auctions - has provided new opportunities
for creative shysters. New twists include elaborate fake websites that
appear to be legitimate escrow services just waiting for an
unscrupulous “seller” to suggest that her buyer deposit his payment
with the escrow service for safety. Another scam involves bogus
“password verification” forms from banks or online auction services
such as eBay, asking victims to disclose their account passwords.
Federal and state prosecutors are worried enough about Internet
auction fraud that they announced a major crackdown earlier this year.
The jury is out on the effect of these measures in stemming the rise
in online fraud.
Even a brief
article on consumer protection issues raised by electronic networks
would be incomplete without at least a reference to the great ease
with which such networks allow salesmen to make undesired sales
pitches via the unholy trinity of voice calls, faxes and e-mails.
While such unwanted intrusions can be annoying, valid solicitations
pose little real danger to consumers aside from the waste of time and
the minimal expenses involved in using the consumer’s supplies or
computer resources. Nonetheless, consumer pressure has led to federal
government action to limit undesired fax and voice sales pitches, and
bills to control spam were introduced in the last three Congresses,
although no federal law has been enacted.
|
