Jurisdiction II: Global Networks/Local Rules
September 11-12, 2000
San Francisco, CA
Protecting Consumers in Cross-Border Transactions: A Comprehensive Model
for Alternative Dispute Resolution
A White Paper Prepared By:
The Better Business Bureau ® System
The Council of Better Business Bureaus, Inc.
and its subsidiary BBBOnLine®
Steven J. Cole
Senior V.P. and General Counsel
Council of Better Business Bureaus, Inc/BBBOnLine, Inc.
Charles I. Underhill
Senior V.P., Dispute Resolution Division
Council of Better Business Bureaus, Inc
Acting Chief Operating Officer
4200 Wilson Blvd.
Arlington, VA USA 22203
The Council of Better Business Bureaus (CBBB) is a North American
organization representing its 132 member Better Business Bureaus throughout
the United States and 15 Bureaus in Canada. BBBOnLine is a
subsidiary corporation of CBBB, with its own Board of Directors representing
leading technology, consumer product, marketing and content provider
companies with a strong interest in the success of e-commerce.
The BBB system promotes industry self-regulation in the public interest,
which it defines as a process driven by the enlightened self-interest of
industry, supported in limited, but critical ways by government to the
ultimate benefit of consumers.
There are few representative models of successful cross-border consumer
dispute resolution mechanisms, since both the dollar value and number of
such transactions are still relatively small. However, the BBB provides a
real-world example of a mechanism that annually handles hundreds of
thousands of individual consumer complaints and handled nearly 7,000 formal
arbitration hearings in 1999.
This paper discusses transactions consummated entirely online, deals
exclusively with "consumer" disputes (those involving a product or service
normally used for personal, family or household use) and covers transactions
that cross international borders.
Drawing on experience in the United States and Canada, the paper's
authors identify three major reasons why discussions on "choice of law" and
jurisdiction are unlikely to address real marketplace problems: 1)
Consumers do not utilize their rights to judicial redress for most problems
they encounter in the marketplace; 2) Solving cross border jurisdictional
and enforcement-related issues in the absence of a common legal framework
will require a standardized set of meaningful consumer protections; and, 3)
Were issues of jurisdictional and common standards to be satisfactorily
resolved consumers would require a convenient way to select from among many
alternatives those reliable companies with which to do business.
The authors discuss the BBB's distinguished and widely recognized role
in resolving advertising, privacy, warranty and general consumer disputes,
citing specific examples from the BBB's considerable experience in
establishing industry codes of practice. Finally, the paper notes the
methods the BBB employs to assist consumers in identifying reliable vendors
of consumer products and services.
The paper discusses standards for cross-border dispute resolution
programs, which must -- at a minimum -- address six key areas of fairness,
visibility, accessibility, timeliness, finality and enforcement. It also
raises issues of special interest in building an online mechanism.
The paper makes the following recommendations:
- A self-regulatory framework provides the best model for consumer
protection in the global e-commerce environment. That framework includes,
1) a strong Code for online consumer protection, 2) a consumer dispute
resolution mechanism that is fast, fair and accessible, 3) a "trustmark" to
enable consumers to recognize merchants that have made commitments to the
Code and to effective dispute resolution.
- Governments play a vital role in the BBB framework by: 1) Adopting
principles that compliment and/or encourage the development of private
Codes; 2) Establishing flexible standards for dispute resolution programs;
3) Establishing methods of certifying "trustmark" programs and auditing
their performance; 4) Taking action under existing legislation/regulation
when companies fail to honor commitments.
- Industry plays a pivotal role in: 1) Encouraging the development of
meaningful standards for online commerce; 2) Funding the development of the
technology infrastructure that will be necessary to ensure dispute
resolution mechanisms are both cost-effective and can be made available at
little or no cost to consumers; 3) Ensuring that opportunities exist which
encourage effective partnering among various countries' consumer groups,
dispute resolution programs and self-regulatory organizations; 4)
Developing private sector funding for new programs.
- Online dispute resolution models must be developed to take advantage of
new technologies while not sacrificing traditional fairness
The Council of Better Business Bureaus, Inc.
CBBB is the North American organization representing its 132 member
Better Business Bureaus throughout the United States and 15 Bureaus in
Canada, with their more than 270,000 local business members, and over 300
leading-edge national and multi-national corporate members. This
partnership supports the Better Business Bureau system and its
self-regulation activities through membership in the CBBB. CBBB's mission is
to promote the highest ethical relationship between businesses and the
public through self-regulation, consumer and business education, and service
BBBOnLine is a subsidiary corporation of CBBB, with its own
Board of Directors representing leading technology, consumer product,
marketing and content provider companies with a strong interest in the
success of e-commerce. BBBOnLine was created in 1995 to help
fulfill CBBB's mission in the online marketplace, and thereby to build
consumer trust and confidence in the vast and constantly evolving
While business self-regulation is well recognized in the United States,
it is less understood in other parts of the world. For purposes of this
paper, the term "self" in self-regulation should not be construed to mean
exclusively industry. Rather, it should be considered as a process driven
by the enlightened self-interest of industry, supported in key ways by
government to the ultimate benefit of consumers. 2 The Better Business Bureau system has significant,
highly successful experience with self-regulation in the U.S. and Canada.
The key elements in the BBB self-regulatory process are performance and
voluntary compliance standards:
- Developed by industry. Industry representatives have a
significant understanding of the depth and breadth of the problems that must
be addressed. In addition, they recognize the need for speed, flexibility
and commitment as well as the need to responsibly deal with public concerns.
Finally, industry standards gain better voluntary acceptance, achieve
substantial compliance faster and can rapidly respond to changing market
- Recognized and complimented by government. By providing
incentives for industry to develop good procedures3, oversight to ensure that industry is vigilant in
managing the self-regulatory process and taking vigorous and visible action
when necessary to support the process4.
- Credible to the public. Industry representatives and
self-regulatory organizations understand that a self-regulatory process that
lacks substance or fails to deal firmly and openly with conduct at variance
with the voluntary guidelines will not be perceived as meaningful by the
consuming public. That, in turn, will lead to enactment of precisely the
type of often sweeping regulation that can strangle innovation and
discourage competition. The BBB experience has established that the
synergistic relationship of meaningful industry standards and effective and
supportive government actions will result in public confidence that will, in
turn, positively reinforce industry's willingness to continue to develop
Informal Dispute Resolution
Conciliation, mediation and arbitration of various types of disputes
enjoy long traditions in many cultures. Arbitration, in particular, has
evolved a formal body of national and international rules and procedures.
When disputing parties voluntarily enter these processes, and when the
agreed-upon rules and procedures are scrupulously observed, a fast, fair and
inexpensive resolution of even a major, complex dispute is probable. While
a number of well-known organizations have experience with international
commercial arbitration, there are few representative models of successful
cross-border consumerdispute resolution mechanisms, since both the
dollar value and number of such transactions are still relatively small.
The Cross-Border, Consumer Context
It is important to note some important limitations to the discussion in
- The framework is that of electronic commerce; thus, the paper deals with
transactions consummated entirely online.
- The paper deals exclusively with "consumer" disputes - those involving a
product or service normally used for personal, family or household
- The transactions that are the subject of the paper must cross
international borders. Where the transaction involves parties within the
same country, the paper assumes that the country's laws, regulations and
formal/informal dispute resolution mechanisms will govern.
Many of the early discussions regarding consumer protection in the
global, cross-border context have centered around so-called "choice of law"
and jurisdiction issues. It is now clear that these ongoing discussions,
while necessary, do not offer any realistic, short-term solutions. Further,
even if the "choice of law" issues were resolved, the BBB experience in
North America suggests that such resolution would not offer true, practical
solutions for cross border consumer disputes. There are three reasons for
- First, our experience in the North America is that
consumers do not utilize their rights to judicial redress for most problems
they encounter in the marketplace.
There are many reasons for this: the high cost of litigation; the
inaccessibility of attorneys; the frequent small dollar value to high
emotional and convenience value disputes; varying education levels; fear;
and the weakness of their strictly "legal" positions and remedies compared
to the perceived harms or inconveniences suffered. These barriers, coupled
with others uniquely attributable to international transactions, surely are
all increased significantly with respect to disputes arising cross
Effective out-of-court remedies that are accessible, fair and cost
efficient are needed. In the United States, these are provided by the
private sector through a variety of techniques, such as third party dispute
settlement mechanisms (e.g., the BBB5),
sophisticated internal company-administered consumer service and complaint
resolution procedures, and, in some jurisdictions, government-sponsored
mediation programs. Small claims court procedures where they exist also
provide effective redress where traditional court remedies are ineffective
or under utilized, and government enforcement in cases of substantial law
violations and significant consumer injury can be helpful. Globally, the
consumer needs are likely to be at least as great, while the non-judicial
remedies are, overall, less available at the present time, and are likely to
remain so for the foreseeable future.
In short, while it is important to encourage businesses and consumers to
participate in e-commerce through the development of governmental rules and
procedures that provide predictability and fairness, it is equally important
to recognize the limitations of these rules as effective redress mechanisms
for most consumers.
We believe that alternative dispute resolution programs will almost
certainly prove to be self-regulatory tools through which most cross-border,
online consumer disputes will be efficiently and effectively resolved.
- Second, solving cross border jurisdictional and
enforcement-related issues, while important, may make it even more essential
that consumers and business have some standardized framework for minimum
Without minimum standards, dispute resolvers (whether they represent
formal or informal mechanisms) have few, if any, common benchmarks against
which to measure adherence or deviation in a given transaction.
Furthermore, formal "choice of law" and jurisdictional rules that otherwise
appear reasonable may fail to gain widespread acceptance in the public
sector and consumer communities. A reasonable fear that a "lowest common
denominator" legal framework will prevail could impede support for otherwise
reasonable proposals. U. S. Secretary of Commerce Daley summed it up nicely
in a 1999 speech to the Amdahl's Good Government Series in California:
"I suspect consumer protection officials all over the world will
be very reluctant to say that their consumers are not protected by local
law. They will need a great deal of certainty that effective protections
are available, before they would even think about limiting the scope of
their local laws."6
In the United States, we have learned much in our own "regulatory
laboratory" about the costs and burdens that can result from widely varying
consumer protection regimes. Lemon laws, retail advertising and
environmental protections are three examples of legislative approaches that
differ substantially within the U.S. from jurisdiction to jurisdiction. As
a consequence, companies that operate across jurisdictional boundaries incur
increased compliance costs, a problem that will only be substantially
exacerbated as the number of competing jurisdictions expands exponentially
in the global market.
We believe that uniform minimum standards of truthful advertising and
fair business practices are absolutely essential, so consumers will have
confidence in the new medium and businesses that adopt those standards can
achieve compliance at reasonable cost. Such minimum standards are
theoretically possible to devise through governmental treaties.
Unfortunately, however time consuming and difficult it may prove to be to
establish such standards within any single country, the difficulty increases
a hundred fold when establishing standards which rely on acceptance across
national boundaries. Harmonizing conflicting standards may not be possible
to accomplish within meaningful timeframes. On the other hand, timely and
effective voluntary standards are very possible to develop through private
sector efforts, especially if governments, working cooperatively, provide
incentives for those efforts.
- Finally, were issues of jurisdictional and common
standards to be satisfactorily resolved, a third crucial need would remain.
How can a consumer conveniently select from among so many alternatives
those reliable companies with which to do business?
A dominant characteristic of the online market is the low entry barriers
for new competitors. Some of these new competitors take liberties with the
legal rules and essential honesty. Many others, however, put consumers at
risk not with any deliberate intent to commit fraud or deception, but
through their inexperience and misjudgment(s) about how to advertise
accurately, deliver on promises made and fulfill orders as promised and on a
The array of information available online is overwhelming. While this
provides consumers with unprecedented opportunities to equalize the
imbalance of knowledge that has traditionally existed between buyers and
sellers, it also creates new difficulties. Drowning in new sources of
information (often of questionable value and occasionally intentionally
misleading or deceptive), how can most consumers determine which businesses,
products and services are worthy of trust?
In the "brick and mortar" business world, the construction of an
impressive business edifice is often a major financial barrier to entry into
the traditional business world and, as a consequence, is also an overt
measure of the strength of those businesses that can maintain such a
facility. In e-commerce, electronic "storefront" web sites are
inexpensive to produce, a positive factor ensuring ease of market entry.
However, absent most of the traditional cues available in the physical
marketplace (not only substantial facilities, but such other important
resources as the relationship with store personnel, the type of media
placements for advertising, the touch and feel of the merchandise, etc.),
consumers lack some important traditional touchstones for good decision
making. Arguments over "choice of law" and jurisdictional rules do not
address this important need.
The same can be said in the traditional world of direct marketing. The
costs of mass marketing (e.g. television advertising and the costs of
printing and mailing catalogs and other promotional materials), often -- and
usually correctly -- lead consumers to conclude that very existence of the
company's substantial mass marketing program provided evidence of that
company's financial substance and reliability. The minimal costs of
online marketing provide consumers with no such reliability "touchstone".
In the same 1999 California speech referenced earlier, Secretary Daley
noted that "consumers want to know they are dealing with a reputable
company. Never having heard of the company, or buying from it before--they
A reliable system that would allow consumers to identify companies
pledged to a set of common standards of online commerce and effective
dispute resolution would foster the growth of e-commerce for both businesses
The Better Business Bureau Experience:
Three Key Elements In The Self-Regulatory Framework
The Better Business Bureau system, through activities of the BBBs in
local communities, national activities of the CBBB, and online activities
through BBBOnLine, offers a working model for others to emulate.
We are actively exploring partnerships with groups in other parts of the
world so that others can build upon our BBB experience, adapting it to
varying national needs. Here's how the BBB has addressed the problems
- First, the BBB system is one of the largest and most
experienced providers of informal consumer dispute settlement services in
the North America, trusted widely by both business and
Better Business Bureaus have handled well over two million cases in our
mediation and arbitration programs since the early 1980's, not to mention
the additional multi-millions of informal complaint-handling cases
undertaken in its history. BBB mediation and arbitration programs are
almost always free to consumers, and serve as widely recognized models of
speed, convenience, due process, flexibility and competence. BBB cases, in
areas as diverse as the automobile industry7,
manufactured housing, national advertising8 and
privacy9, are decided using a variety of
different techniques applicable to the particular situation, including both
equity-based decisions and those based upon the application of legal
principles. Trained subject matter professionals and trained volunteers, as
appropriate, are used with considerable success.
- Second, the BBB system has a long and distinguished
tradition in working with the business community to set or administer
uniform standards of fair advertising and business practice.
Currently, BBBOnLine is in the final stages of developing a Code
of Online Business Practices10. The Code,
currently in draft form11, will set voluntary
performance standards for online business performance. Covering not only
advertising and but also "transaction" issues, the Code incorporates dispute
resolution features and is intended for an international audience.
Our Online Code activity is an outgrowth of the renowned BBB Code of
Advertising12, which is followed by the
retail industry and has formed the basis for numerous local government
advertising codes as well as the important Federal Trade Commission
Guides to Deceptive Pricing13. Our
national advertising program, administered by CBBB's National Advertising
Division (NAD)14 in alliance with the three
major advertising trade associations (AAF, ANA, AAAA), has been called by
Federal Trade Commission Chairman Robert Pitofsky the best example of
self-regulation he has seen. The CBBB's Children's Advertising Review Unit
(CARU) has been a leader in setting advertising standards15 applicable to the unique needs and cognitive
abilities of children, and, like NAD, enjoys an outstanding level of
voluntary compliance by industry. The CBBB's Philanthropic Advisory Service
(PAS) applies our experience in business self-regulation to the charitable
community, setting and implementing at national and local levels
widely-observed fund raising, governance and accountability standards16 for soliciting organizations. Finally, in response
to substantial interest, encouragement and support from the business
community and government leaders, CARU17 and
BBBOnLine18 have established and
implemented programs to assure that individual privacy is protected in
online transactions. Together, these programs set rigorous, but practical
disclosure, choice, security and access standards, and incorporate a
verification and dispute resolution program of high quality.
BBB standard-setting activities work for three essential reasons. First,
they are developed and implemented "by" industry, and are not done "to"
industry. They are examples of self-regulation at its best. Second, our
business members and supporters understand that the BBB self-regulation
programs will not serve them if they do not serve their customers.
Consequently, while our standards and implementation activities are
practical and reasonable from a business perspective, they are fair and
responsive to consumers. Finally, since BBB self-regulation must not only
be effective, but must be seen to be effective, business -
from the largest multi-national companies to the smallest local firms -
understands that BBB advertising19, complaint
handling20 and local dispute resolution
programs21 must be publicly accountable.
- Third, the BBB system's most widely recognized function
is to assist consumers finding companies in which they can place their
To begin with, BBB members must meet minimum membership
requirements22 that speak to truthful
advertising and good faith resolution of consumer complaints, among other
things. In a very recent development designed to assist consumers in finding
companies that meet our standards, BBB members may display a member logo and
identify themselves as members in their advertising.
All BBBs assist consumers in pre-purchase research by providing
"reliability reports" on members and non-members alike, describing the
business' marketplace record. These reports are now online in many Bureaus
through the CBBB's web site (http://www.bbb.org/reports/) or
through independently operated sites linked from the CBBB site (e.g. the
Boston BBB at http://www.bosbbb.org/searchfor
Finally, CBBB and the BBB system operate two widely recognized "seal"
programs. The BBBOnLine "reliability" program, designed to
identify companies adhering to BBB marketplace standards and dispute
resolution procedures, is the largest "trustmark" program on the Internet
with nearly 4,200 distinct participating companies (http://www.bbbonlin
e.org/database/search/list.cfm). The recently implemented
BBBOnLine privacy program includes more than 265 separate sites
displaying the BBB Privacy Seal (http://www.
bbbonline.org/businesses/privacy/approved.html). Both are intended to
assist consumers in finding companies that meet our high standards in the
Not only can consumers quickly identify companies that participate in the
BBB seal programs through the Internet, but such BBB information is nearly
universally accessible through automated voice response systems maintained
by most local BBB offices.
Alternative Dispute Resolution In The Cross-Border Context
In the context of global e-commerce, disputes involving online
transactions are likely to run the gamut from very small dollar value
conflicts involving two individuals (for example, collectibles sold through
online auction sites), to multi-million dollar business-to-business (B2B)
While the complexity of the B2B disputes may be significantly greater,
that very complexity and the high dollar value will help ensure that there
will be fewer disputes arising out of these transactions and that the
parties to these transactions will have incorporated sophisticated, tailored
dispute resolution mechanisms into their underlying contracts.
By contrast, the shear volume of consumer transactions, coupled with the
relative lack of sophistication on the part of the parties, is more likely
to generate a significantly large caseload. At the same time, the parties
will be less likely to be familiar with any form of alternative dispute
This presents a daunting challenge for the design of a consumer dispute
While this paper is intended to focuses on disputes where consumers,
sellers and various transaction "facilitators" (credit card issuers, banks,
delivery systems, ISPs, etc.) reside in different nations and, therefore,
different legal jurisdictions, we believe the existence of readily
accessible mechanisms will help facilitate informal dispute resolution
within jurisdictions, augmenting laws within individual national
Certainly, within any given country, informal dispute resolution systems
should be encouraged as quick, informal ways to obtain redress. In 1985, in
an effort to extend consumer protection protocols throughout the global
community, the United Nations approved its Guidelines for Consumer
Protection. The Guidelines (as expanded in 1999 to include
issues involving sustainable consumption) are designed " . . . to assist
countries in achieving or maintaining adequate consumer protection for their
population as consumers"23. Of the several
needs these Guidelines are intended to address, one is to ensure
the "availability of effective consumer redress".
Since it is clear that governmental and extra-governmental systems (some
nascent, some enjoying long traditions) exist in many countries, nothing in
this paper is intended to supplant those systems.
Where consumer disputes cross national borders and jurisdictions, a
special system is required. Consumers and businesses need a reasonable
certainty that redress mechanism(s) will be available and will be utilized.
Perhaps most important, there must be positive advantages to participation
and negative consequences for failing to honor commitments made during the
dispute resolution process. Finally, the cost to the parties (both in time
and money) to participate and to gain adherence to decisions made through
the process cannot be so significant (with respect to the amount of the
transaction) that the process is effectively impotent.
There are a number of key issues that should be addressed in any
cross-border consumer dispute resolution mechanism. We consider six to be
essential. These are:
- Fairness. Consumer dispute mechanisms must have
structure, rules and procedures that ensure that all parties' rights are
protected and that every aspect of the mechanism operates with regard to the
parties' rights to due process.
- Visibility. Consumers must be fully knowledgeable of
the existence of any mechanism. While it is desirable that consumers have
this knowledge prior to purchase, it is critical that this information be
available at the time a dispute arises.
- Accessibility. The mechanism must be readily
accessible by consumers when a dispute arises. Accessibility not only means
that the mechanism can be called upon when needed, but that there are no
unreasonable barriers to access (including unreasonable costs).
- Timeliness. There is an old adage that "justice
delayed is justice denied"; it applies particularly to consumer dispute
resolution. Disputes should be resolved as quickly as possible, taking into
account the need for the parties to provide (or the mechanism to collect)
sufficient information upon which to base a resolution.
- Finality. The mechanism should, to the greatest extent
possible, ensure that decisions fully and finally resolve individual
consumer disputes. The BBB offers a number of models that achieve this end
including binding arbitration, conditionally binding dispute resolution,
non-binding informal dispute settlement and non-binding measurements against
- Enforceability. The mechanism should ensure that
decisions it renders are quickly and completely honored.
Each of these guidelines interconnects with the others; together, they
form an excellent framework under which to discuss cross-border, online
Perhaps no one element of a consumer dispute resolution process is of
greater importance than the essential fairness of the mechanism. Parties to
any dispute have a right to expect that the process will operate in a
completely impartial manner.
The Federal Trade Commission, in proposing Informal Dispute Resolution
Rules24 under the Magnuson-Moss Product
Warranty Act25 in 1976, set forth detailed
requirements giving significant specificity to the Warranty Act's stated
intention to encourage warrantors to develop fast, fair, informal procedures
for the resolution of warranty disputes.
The European Commission, after significant consultations among its
members, established a set of basic principles for out-of-court settlement
of consumer disputes26. These seven
principles (which mirror, in many respects, the FTC Rule 703 "standards")
deal directly with the following broad policy areas:
- The "independence" of the mechanism and decisionmaker(s);
- The "transparency" of the procedure(s);
- The "adversarial process", allowing for arguments and cross-examination
by both parties and/or their representatives;
- The "effectiveness" of the process;
- The "legality" of the process;
- "Liberty" within the process (process may be binding only if parties
were informed in advance and specifically consented;
- "Representation" in the process;
As the leading consumer dispute settlement organization in North
American, the Better Business Bureau's rules and procedures have long
embodied these fairness principles as have those of commercial dispute
resolution mechanisms, such as the American Arbitration Association27. In the consumer context, we have long maintained
that these fundamental fairness principles should include:
- Ready access to meaningful information about the dispute resolution
- Neutral, independent program administration and dispute resolvers
possessing sufficient knowledge and skills to perform their duties
- Dispute resolution services provided at no cost or at a low cost when
measured against the value of the transaction in dispute.
- The absence of geographic, linguistic or other barriers to the fullest
practical participation in the entire dispute resolution process.
- Time frames that ensure a quick resolution of the dispute, taking into
account various aspects of the nature of the transaction.
- A right to have adequate representation during the process.
The principles outlined in these various protocols (with a few limited
exceptions) all form a solid framework within which to address concerns
about the fairness of the process.
Regardless of the fairness of a program's rules and procedures, a dispute
resolution mechanism that is invisible is useless. In the United States
and Canada, Better Business Bureaus have such a high public name recognition
(nearly 100% in a 1996 Gallup Study) that consumers often find their way
into BBB arbitration programs without specific knowledge that an individual
company has "precommitted" to a dispute resolution program. This experience
may be true for other public and private agencies in other jurisdictions.
Where this is not so, the BBB system would like to provide partnership
While a public recognition quotient may be one critical key to success,
it is also important that information about a mechanism be clearly available
at the point of the transaction. For this reason, information about the
BBBOnLine Reliability Program standards, including dispute
resolution, is available when a consumer clicks on the program seal to
confirm the company's participation. Similarly, our BBBOnLine
inform the public of the firm's participation in the BBBOnLine
Privacy Program and provide a means (usually a hyperlink) through which
consumers can obtain additional information or raise a concern.
The Federal Trade Commission recognized the critical importance of the
visibility of a dispute mechanism in product warranty disputes in the United
States. The FTC requires a warrantor under its Rule 703 (See note 24) to
make basic disclosures about the availability of a complying dispute
resolution mechanism (including the name, address and toll-free telephone
number of the mechanism) on the face of the consumer warranty. Further, the
FTC requires that warrantors take additional steps to inform consumers about
the availability of the mechanism at the time a warranty dispute arises.
A mechanism that is not visible could hardly be considered accessible.
However, there are many other proven barriers to access that must be
considered. First among these may be cost. If there is a cost to the
consumer for using the dispute resolution mechanism, that cost will
increasingly hinder consumer access as the cost of the dispute resolution
approaches the value of the issue(s) in dispute. In the United States,
there have been several recent examples (generally in the context of
"pre-dispute", binding arbitration clauses incorporated into consumer
contracts) where courts have held that the costs and filing fees of the
arbitration process were unconscionable when measured against the cost of
The Better Business Bureau believes that consumer dispute resolution
services should be provided at low or no cost to consumers. Otherwise,
given the relatively low dollar value of issues in dispute, fees would prove
a significant barrier to meaningful redress.
It is important to note that "low or no cost to the consumer" does not
mean that a dispute resolution mechanism is without cost. A mechanism must
be adequately funded at a level sufficient to ensure that it is capable of
fully meeting its obligations to the parties. As recognized by the U.S.
Federal Trade Commission in its warranty regulations, that invariably means
business funding. Accordingly, steps must be taken to ensure impartiality
of the mechanism, both in appearance and in fact, or else free/low cost
quality consumer dispute resolution processes are unlikely to exist -- to
In addition to cost, there may be a number of other barriers to access.
These would include such issues (among others) as cumbersome case filing
procedures, slow (or no) response to consumer inquiries and timeliness in
the handling of cases after filing (see below). To these, in the global
context, there are additional barriers that must be addressed and overcome.
These include language, custom and time zone differences.
At a time when courts in the United States often have multi-year waiting
lists before cases even appear on a docket, one of the major advantages of
alternative dispute resolution in the consumer context is its potential to
handle cases timely. However, if a dispute resolution mechanism, by design
or through mismanagement, routinely delays the ultimate resolution of cases,
consumers will become discouraged. Either the issue in dispute is no longer
material (in the extreme case, the consumer is deceased) or the consumer
becomes discouraged and withdraws from the process.
BBB Rules of Binding Arbitration provide that cases will be concluded
within 60 days of filing; the BBB AUTO LINE Rules provide for case handling
within 40 days. This shorter time frame is consistent with the FTC's Rule
703, which requires that warranty dispute mechanisms in the United States
issue a decision on a case within 40 calendar days of the date that the
claim was formally filed with the warrantor's mechanism. While 40 calendar
days may be very expeditious in the "brick and mortar" world, given the much
more "instantaneous" nature of e-commerce, it is reasonable to believe that
consumers will expect faster case-handling times in the future. We believe
this will require that online dispute resolution programs make significant
investments in technology to meet user expectations under Internet time
A dispute resolution process that holds out the promise of "resolution"
must deliver on that promise. This means the parties (both consumer and
business) have a right to expect that -- if all other techniques fail -- the
process will formally "decide" the issues that have been submitted.
Mechanisms should be encouraged to facilitate direct contact between
disputing parties in the early stages of a dispute and to encourage
mediation; however, those which merely facilitate without ultimately making
a conclusion available to the parties perform no service if one of the
parties proves recalcitrant.
There are many ways to ensure finality in the consumer dispute resolution
process. The BBB provides several different models:
- Binding Arbitration. Both parties enter the dispute
resolution process and agree to be legally bound by the
- Conditionally-Binding Arbitration. The business
"pre-agrees" to arbitrate disputes at the consumer's request. The
arbitrator's decision is not binding on either party unless the consumer
formally accepts the decision. Once accepted, the decision becomes binding
on both the company and the consumer.
- Informal Dispute Settlement. The parties enter a
non-binding process that provides a decision. Neither party is bound by the
decision, but the company must act in good faith in determining whether and
to what extent to honor the decision.
- "Trustmark" Programs. The "trustmark" holder agrees
to a set of standards and a dispute resolution process to resolve disputes
relating to adherence to those standards. The decision of the process is
not binding on the company, but failure to honor the decision may result in
a loss of the "trustmark".
In all these models, the disputants have a right to expect a timely
decision free from ambiguity.
Closely connected to, but separate from, the issue of "finality" is the
issue of "enforcement". A clear, unambiguous dispute mechanism decision
that is not followed weakens the parties' faith in all dispute resolution
There are a number of different enforcement techniques:
- Easy enforcement in court. Arbitration statutes in the
U.S. and elsewhere recognize disputants' right to voluntarily submit
disputes to binding arbitration. If key "due process" requirements are met
during the arbitration process, courts will confirm arbitrators' decisions
without rehearing the issues in dispute.
- Recognition of dispute resolution processes in court.
Certain Better Business Bureau arbitration agreements contain provisions
that non-binding decisions of an "informal dispute resolution" process may
be introduced in evidence in subsequent court proceedings. U.S. Federal
Trade Commission warranty dispute rules contain similar provisions.
In the global cross-border context, however, enforcement takes on greater
significance, yet traditional "enforcement" may prove elusive. While
enforcement of arbitration awards in multi-million dollar international
commercial disputes is quite likely under existing treaties, the costs of
legal enforcement of consumer dispute mechanism decisions may be as
impractical as the costs of litigating them. We believe that other sanctions
may ultimately provide equal -- and perhaps better -- assurance of
enforcement than formal legal "confirmation" procedures.
Here are some examples from the BBB's experience:
- Withdrawal of membership. BBB minimum membership
standards provide that a member "comply with any decisions rendered through
Bureau arbitration programs in which the firm agrees to participate".
Failure to honor a duly rendered arbitrator's decision will result in a
proceeding to publicly revoke a firm's membership. Notice of that
revocation is incorporated into the company's BBB report, which is given to
consumers who call the BBB to make a pre-purchase inquiry on the company's
- Withdrawal of a "Trustmark". Failure to abide by an
arbitrator's decision in the BBBOnLine Reliability Program will
result in revocation of the BBBOnLine Reliability Seal. Failure to
abide by a final determination in the BBBOnLine Privacy Dispute
Resolution Program will also result in a revocation of the Privacy Seal.
- Public Reporting of Non-Compliance. The CBBB's
National Advertising Division publicly reports failures to cooperate with
the self-regulatory process.
- Government Back Up. As noted earlier, the FTC has
investigated and taken action against advertisers when advertisers have
failed to honor decisions emanating from the self-regulatory
We believe that if consumers are encouraged to conduct e-commerce on
sites which offer "certified" dispute resolution programs, and if those
certification procedures require that programs remove from participation
those "trustmark" holders that fail to abide by a decision, there may be
greater incentives to comply (or disincentives for non-compliance) than
might exist through the normal legal processes of any individual
"Off line" Local to Online Global -- Unique Issues for
Discussion. None of the issues outlined thus far are unique to the
online environment; they are fundamental issues that are applicable to any
consumer dispute resolution mechanism. However, as has been repeatedly
proven, the Internet is reshaping commerce with lightning-like speed.
We note that there have been a number of recent experiments with online
dispute resolution, and there are new online mechanisms, both non-profit and
for-profit, offering to put the latest Internet technologies at the service
of disputing parties. These have generally focused on more complex
commercial transactions and disputes where the "cost/benefit" of using these
technologies is obvious. There have also been some very preliminary (and
largely academic-based) initiatives to experiment with Internet technology
for smaller disputes. However, a great deal more must be done before any
but the most tentative conclusions can be drawn. In truth, as we noted at
the beginning of this paper, there are simply no truly representative models
of successful cross-border, online consumer dispute resolution programs.
The Better Business Bureaus in the United States and Canada have had
online consumer complaint forms -- one uniquely designed for the BBB AUTO
LINE program28 and one for generic consumer
complaints29 -- for the past three years. We
estimate that twenty to thirty percent of the basic BBB consumer complaint
activity is now coming through the BBB's website, a dramatic shift in a very
short period of time. A closer analysis of these statistics illustrates
just how fast change happens. On an average month during 1999, roughly 24%
of all BBB complaints arrived online. However, in November 1999, that
figure was 27% and in December 1999, it had increased to 34%. In January
2000, the percentage had again increased to somewhere between 36% and
There are a number of unique issues that will ultimately need to be
addressed. However, from our experience, coupled with our growing
understanding of a number of related issues, we believe the following issues
-- many of which are strongly linked -- will need to be addressed
- Volume. Most dispute resolution mechanisms, including
the courts, rely on a system of barriers (however benign) to retard entry
and encourage resolution at lower levels. If one assumes that an online,
global consumer dispute resolution mechanism exists, that it meets the
requirements for accessibility and visibility, that it is fair, impartial
and trusted by consumers and that online merchants have pre-agreed to use
such a mechanism, then the Internet eliminates most traditional barriers.
It may be difficult and time consuming for a consumer to go down to a small
claims court, pay a filing fee and receive a date upon which to return and
argue a case. However, for the investment of a few minutes of time online,
a consumer can initiate a dispute resolution process without ever leaving
home. Given the explosive growth of online commerce, the potential consumer
complaint volume will be a major factor with which dispute resolution
mechanisms must deal effectively.
- Speed. As we previously noted, a 40-calendar-day time
frame (from complaint filing through decision) may be considered quite fast
in the "brick and mortar" world, but it may be considered extraordinarily
slow in a world where "excellent customer service" may mean responding to a
consumer request in minutes or hours, rather than days or weeks. Dispute
resolution mechanisms will need to adapt to Internet time frames or
consumers and merchants will find them unsatisfactory.
- Technology. The major solution to both concerns about
volume and speed lies in adapting Internet technologies to consumer dispute
resolution. Unfortunately, the low dollar value of consumer disputes,
coupled with the desire to provide dispute services at low or no cost, gives
little incentive for entrepreneurial investment. At the same time, the
potential volume of consumer cases will require a larger investment in
robust technology that can be rapidly scaled up to meet demand. We believe
a partnership among governments, non-profit foundations, academic
institutions and the private sector will be necessary to ensure that the
technological infrastructure will be in place.
- Language and Cultural Issues. As online commerce
transcends national borders, it crosses major language and cultural barriers
as well. Without speaking another language well (or perhaps at all), a
consumer from one country may be able to navigate through a well-constructed
web site in another country well enough to place an online order. It is
quite another matter for that customer to try and explain the complexities
of his or her dissatisfaction to the company or a third party speaking his
or her native language. Similarly, it may be difficult for a company or
third party to understand a specific cultural context within which lies a
customer's dissatisfaction with a product or service. Treating these
cross-lingual and cultural issues in the consumer dispute context will be an
early challenge for the construction of effective dispute resolution
- Credibility Issues. The classic fact-finder often
relies on ascertaining the veracity of witnesses by the appearance and
demeanor of the parties and their witnesses -- "looking them in the eye".
Such visual cues may be absent from a dispute resolution process where the
parties and the neutral may be separated by several thousand miles. In any
event, such cues might actually be quite misleading, since they are set in a
cultural context. For example, a witness who looks another person in the
eye may considered to be truthful in one culture and may give great offense
in another. Dispute resolution processes will certainly need to take these
issues into account and may need to modify procedures or find new and
different methods to deal with these issues.
- Production of Evidence. In the "brick and mortar"
world, the parties produce evidence or witnesses by bringing the documents
or the witnesses with them to a hearing. In the electronic world, where
documents cross continents in a nanosecond via email, it is simple to
believe that evidence will be produced the same way. While that may be
valid in major commercial disputes, it is unreasonable to assume that every
consumer with Internet access is also a document imaging specialist.
Accordingly, thought needs to be given to the means through which the
average consumer may submit evidence to the mechanism (certainly not ruling
out ordinary mail) and how a mechanism may obtain credible testimony from
witnesses (including how and when electronic "witnesses" may be
- Inspections. In the BBB's consumer programs,
arbitrators often conduct "on site" inspections of a product or service that
is the subject of a dispute. Such inspections might prove pivotal in
determining whether a fault exists and, if so, where that fault lies. What
types of provisions might an online mechanism make for the equivalent of
- Compelling Consumer Participation. There is one
significant policy issue not previously addressed in this document, but
which will require immediate attention. Companies in the United States have
a long history of incorporating binding arbitration provisions into
commercial and union/management contracts. Courts recognize the validity of
these pre-dispute agreements and have upheld them routinely. Over the past
decade, however, there is a growing movement toward incorporating such
clauses in consumer contracts. This has become a highly charged,
The European principles (under its category of "liberty" within a binding
dispute resolution process) address the issue of the voluntary nature of
arbitration, attempting to ensure that the consumer has knowingly and freely
chosen to elect to bind him/herself to a mechanism's decision. Under the
European Principle, a consumer's election to arbitrate may not be the
result of a commitment prior to the actual disputing arising.
In a similar context, the Better Business Bureau system has established
a Policy for Voluntary Consumer/Business Arbitration in Contractual
Commitments30. Recognizing that courts
in the U.S. have generally upheld these clauses, with restrictions, the BBB
policy sets protocols under which a business may name the BBB in one of
We believe that the issue of such pre-dispute clauses will need to be
dealt with immediately. We further believe this may ultimately be an issue
of little real significance, since we believe the use of these clauses may
prove impractical in the global, cross-border context. The generally small
dollar value of consumer transactions, coupled with the difficulty and cost
of attempting to enforce a pre-dispute clause in some international
forum(s), will likely make the practice moot.
The Role Of Governments
At the beginning of this paper, in discussing the role of
self-regulation, we observed that it facilitates consumer self-reliance,
encourages industry innovation and provides a true "safety net" for
consumers and responsible industry members. We noted the important role we
believe alternative dispute resolution can play. Finally, and perhaps of
greatest importance, we voiced our conviction that thoughtful government
oversight and enforcement provides a necessary fertile medium in which
self-regulation can flourish.
We believe that the role of governments, in the framework of cross-border
consumer protection, should be:
- To agree upon a set of international "standards" for consumer dispute
- To give some formal "standing" or "certification" to "trustmark"
programs which meet these standards. Recent "safe harbor" negotiations are
one example of how government can create positive incentives for
- To provide reciprocal, uniform audit mechanisms to ensure citizens of
their respective jurisdictions that "trustmark" programs live up to their
commitments. For consumers, finding reliable "trustmark" programs will be
as important as finding reliable companies. This will be particularly true
where trustmark organizations are new and not recognized by consumers and
- To use the force of local laws and regulation to aggressively pursue
those companies that fail to live up to their commitments, abuse the system
or engage in fraudulent or deceptive acts or practices.
The Better Business Bureau believes that a self-regulatory framework
provides the best model for consumer protection in the global e-commerce
environment. That framework includes, at a minimum: 1) A strong Code for
online consumer protection, 2) A consumer dispute resolution mechanism that
is fast, fair and accessible, 3) A "trustmark" to enable consumers to
recognize merchants that have made commitments to the Code and to effective
Governments play a vital role by: 1) Adopting principles that
compliment and/or encourage the development of private Codes; 2)
Establishing flexible standards for dispute resolution programs; 3)
Establishing methods of certifying "trustmark" programs and auditing their
performance; 4) Taking action under existing legislation/regulation when
companies fail to honor commitments.
The private sector can play a pivotal role by: 1) Encouraging the
development of standards for online commerce; 2) Funding the development of
the technology infrastructure that will be necessary to ensure dispute
resolution mechanisms are both cost-effective and can be made available at
little or no cost to consumers; 3) Ensuring that opportunities exist which
encourage effective partnering among various countries' consumer groups,
dispute resolution programs and self-regulatory organizations; 4)
Developing private sector funding for new programs.
In conclusion, we believe that sustained efforts by all interested groups
to build alliances and relationships will be absolutely essential toward the
goal of fostering global online commerce to the benefit of consumers and
merchants in every country. The Better Business Bureau system and
BBBOnLine have demonstrated a commitment to that ideal. This
document renews our commitment.
The Better Business Bureau's Marketplace Dispute Resolution
Self-Regulation in Action
The Better Business Bureau movement in the United States began in the
early 1900s when groups of responsible businesspersons in local communities
determined to speak out for truthful and accurate advertising and selling
practices. Leaders within the business community created "advertising
vigilance committees" to establish responsible advertising and selling
standards, monitor marketplace practices against those standards and call
public attention to practices which did not meet these standards.
By the mid-1920s, these "vigilance committees", now known as "Better
Business Bureaus", had become recognized by the general public as a credible
source of information about ethical business practices. As a consequence,
consumers began to turn to the BBB when they felt that a business'
advertising or selling practices did not live up either the BBB standards or
the company's promises.
By the 1950s, Better Business Bureaus across the United States processed
hundreds of thousands of complaints annually, using a process of
conciliation and mediation to assist businesses and consumers in resolving
an impressive percentage of these cases quickly, inexpensively and
In 1970, the National Better Business Bureau (which monitored national
advertising and selling claims) and the Association of Better Business
Bureaus (the coordinating body for 170-plus BBBs in the United States and
Canada) merged to form the Council of Better Business Bureaus, Inc. Shortly
after the CBBB was formed, the BBB system launched two major self-regulatory
initiatives to improve the consumer marketplace. The first, the National
Advertising Division/National Advertising Review Board, was designed to
investigate and resolve disputes involving the truth and accuracy of
regional and national consumer advertising.
The second initiative, the National Consumer Arbitration Program, was
intended to provide consumers with effective resolution of individual
consumer product and service disputes at the local, grassroots level.
Patterned after arbitration techniques that had enjoyed a long and
successful history in the labor and commercial arenas, the BBB Consumer
Arbitration Program was designed to use trained BBB volunteer arbitrators,
drawn from all walks of community life, to resolve a wide variety of
marketplace disputes. From 1972 through 1978, the Consumer Arbitration
Program grew in scope, as more and more local BBB offices adopted the
program. After several major evolutionary steps, the BBB Consumer
Arbitration Program has become the most visible model of a working consumer
dispute resolution program.
In 1996, CBBB launched a third initiative, BBBOnLine(r), a
"trustmark" program designed to ensure consumer trust and confidence in
e-commerce. BBBOnLine offers both a Reliability trustmark and a
separate Privacy trustmark (launched in 1999) to businesses who meet BBB
standards. Both programs include effective dispute resolution as an
The CBBB National Advertising Division, Children's Advertising Review
Unit And The National Advertising Review Board.
In an effort to sustain "truth and accuracy in national advertising"
through self-regulation, a two-tier system was created by the advertising
community in 1971. It consists of the National Advertising Division of the
Council of the Better Business Bureaus, Inc. (NAD) and the National
Advertising Review Board (NARB). The NAD is the investigative body, while
the NARB is the appeals body of the system.
NAD is the first level that investigates the truthfulness and accuracy of
a national ad and NARB is the second part of the self-regulatory process.
When an advertiser or challenger disagrees with NAD's findings, NAD's
decision can be appealed to the NARB for additional review. The advertiser
(whose ad claims are in question) has an automatic right to a review by an
NARB panel; however, the complainant (also referred to as the challenger)
must have approval from NARB's chairman. The NARB Chairman will only grant a
challenger's request for an appeal if he determines that there is likelihood
that a NARB panel would reach a decision different from NAD's
NAD and NARB actions and decisions are highly visible and widely
publicized32, enhancing the credibility of the
process and helping ensure a high rate of industry cooperation with the
process and compliance with decisions.
The Children's Advertising Review Unit (CARU) of the Council of Better
Business Bureaus reviews advertising and promotional material directed at
children in all media. When advertising is found to be misleading,
inaccurate, or inconsistent with CARU's Self-Regulatory Guidelines for
Children's Advertising33, CARU seeks change
through the voluntary cooperation of advertisers. CARU's Self-Regulatory
Guidelines are subjective, going beyond the issues of truthfulness and
accuracy to take into account the uniquely impressionable and vulnerable
child audience. Recognizing that the special nature and needs of this
youthful audience require particular care and diligence on the part of
advertisers, CARU performs a high level of monitoring.
CARU follows dispute resolution procedures that are similar in many
respects to those of NAD and its actions are also made public34.
BBBOnline® Privacy Program
In June 1998, BBBOnLine, the CBBB affiliate, announced that it
intended to establish a privacy "trustmark" program.35 Proving how quickly industry self-regulatory
efforts can respond to new marketplace needs, the program announced it was
accepting applications for its seal in January 199936. The program was formally opened in March 1999.
The program includes a complete dispute resolution process37, patterned on the highly successful NAD model.
BBB Auto Line
In 1978, General Motors Corporation launched a pilot program to test the
use of consumer arbitration to resolve automobile warranty disputes. Based
upon the success of the pilot program in 4 U.S. cities, 38 GM made a decision to systematically expand the
program throughout the U.S.
Operating under the name "BBB AUTO LINE", the BBB warranty dispute
resolution program was designed to be consistent in all respects with the
Magnuson-Moss Warranty Act39 and the Federal
Trade Commission Informal Dispute Settlement Rule40 promulgated under that Act.
In 1983, General Motors Corporation signed a consent decree with the
Federal Trade Commission. The Commission had filed an action against GM,
alleging certain defects in vehicles produced by GM. In the consent decree,
GM agreed to make repairs or reimburse consumers for repairs already made to
certain components of consumers' vehicles. GM further agreed that, in the
event of a dispute over whether the customer was entitled to a
reimbursement, it would submit such disputes to BBB volunteer arbitrators
for a decision.
During the first full year of the GM/FTC consent order, the BBB system
handled 244,300 claims filed by consumers. Most of these claims were
settled without resort to an arbitrator's decision. However, approximately
15,300 cases (6.3% of all cases) were sent to hearings before BBB volunteer
During the 1980s, each of the individual states enacted so-called "lemon
laws", designed to protect consumers who were alleging that they had
purchased a defective motor vehicle. Several of these state's laws require
consumers to make use of an informal dispute resolution process such as BBB
AUTO LINE (if the manufacturer has such a process and if the process
complies with the FTC's Informal Dispute Settlement Rule) before bringing an
action under the state's "lemon law".
Currently, in addition to General Motors, 31 international automobile
manufacturers' brands participate in BBB AUTO LINE42. Under the present program, manufacturers are
"precommitted" to resolve disputes through the BBB. If a case must be
arbitrated, the arbitrator's decision is not binding on the consumer unless
the consumer makes a written acceptance of the decision. If the consumer
does accept the decision, then both the manufacturer and the consumer are
bound by its terms. If the consumer does not accept the decision, the
consumer is free to pursue legal remedies in other forums. Generally, cases
are handled from intake through arbitrator's decision in 40 calendar
During 1998, BBB AUTO LINE handled over 36,000 cases; over 6,500 (18%) of
those cases were resolved through an arbitrator's decision. In the period
from full implementation of the program in 1982 through November 1999, BBB
AUTO LINE has handled an astonishing 1,633,900 individual consumer warranty
disputes. The majority of these cases were resolved to customers'
satisfaction through a process of mediation; however, over 233,600 were
resolved through formal hearings before BBB-trained volunteer arbitrators
serving in local communities throughout the United States.
The BBB Care®/BBBOnline® Reliability Program
Commencing in the mid-1980s, local Better Business Bureaus developed
programs for local business members patterned after many of the elements of
the BBB AUTO LINE program. Companies would be permitted to use a designated
logo to affirm their affiliation with the BBB provided that they:
- Were a member in good standing of the BBB;
- Met all the BBB membership standards, including adherence to the BBB
Code of Advertising; and,
- Signed a commitment to resolve disputes through a formal dispute
resolution process at the request of the consumer.
Approximately 60,000 companies currently participate in one of more forms
of the BBB CARE program. While most consumer complaints are handled quickly
and simply through BBB conciliation or mediation, we estimate that during
1999, local Better Business Bureaus will handle nearly 1,800 BBB CARE
arbitration cases (in addition to over 5,700 BBB AUTO LINE cases) in local
offices throughout the U.S.
The BBBOnLine "reliability" program is the online successor to
the BBB CARE program, with the likely addition of a new Code of Online
Business Practice that is currently under development for 1st quarter 2000
implementation. With more than 4,200 participating companies, it is the
largest "trustmark" program on the Internet.
- A fuller discussion of the BBB and its programs can be found at Appendix A.
- An excellent discussion of self-regulation in the context of e-commerce ("Observations on the State of Self-Regulation of the Internet"), prepared by the Internet Law and Policy Forum for the October 1998 OECD Ottawa conference can be found at: http://www.ilpf.org/selfreg/whitepaper.htm
- The U.S. Congress provided an incentive for industry to implement informal dispute resolution programs by providing that warranties may include a provision requiring customers to try to resolve warranty disputes by means of an informal dispute resolution mechanism before going to court, provided the mechanism meets certain performance standards established by the FTC (For details, see note 24). State "lemon laws" for new vehicle warranties contain similar incentives. As an example, California encourages manufacturers to establish dispute mechanisms "certified" by the state, in essence providing that consumers may be entitled to "double damages" in a successful court proceeding if the manufacturer does negotiate in "good faith". Evidence of "good faith" is that a manufacturer operates a "certified" mechanism.
- As an example, see http://www.caru.org/nad99/0710.asp
- See at Appendix A.
- http://www.law.osaka-u.ac.jp/~kagayama/Consumer/Documents/UNGuidelinesE.html#Redress -- Section II (General Principles), 3. (e).
- 16 CFR 703 (http://www.bbb.org/complaints/Rule703.html)
- Public Law 93-637. (http://www.ftc.gov/bcp/conline/pubs/buspubs/warranty/undermag.htm)
- The European Commission, Health and Consumer Protection, "Commission Recommendation on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes" at http://europa.eu.int/comm/dg24/policy/developments/acce_just
- The American Arbitration Association, A Due Process Protocol for Mediation and Arbitration of Consumer Disputes, April 17, 1998 at: http://www.adr.org/education/education/consumer_protocol.html
- Council of Better Business Bureaus, Inc., Policy for Voluntary Consumer/Business Arbitration in Contractual Commitments, March 25, 1998.
- For a more complete description of the NAD process, see: http://www.bbb.org/advertising/narb.asp#1
- For recent press releases, see: http://www.bbb.org/advertising/NADrelease.asp
- The cities were: Minneapolis/St. Paul, Minnesota; Buffalo, New York; Philadelphia, Pennsylvania; Oakland/San Francisco, California.
- Public Law 93-637.
- 16 CFR 703.
- It should be noted that, during this period, there was a second FTC consent order -- this one between the FTC and Volkswagen of America -- requiring BBB arbitration as the final step in a dispute settlement process.
- For a list of manufacturers, see: http://www.bbb.org/complaints/BBBautoLine.asp#part