Hybrid Approach To Protect Distance Consumers

The most significant character of a distance-purchase contract is the “distance”,which gives the vendor reasonable grounds to require consumer to pay in advance.The weakness positions of distance consumers are result from consumers have noideas about their counterparties; they are not able to inspect the goods they are goingto buy. In addition, consumers can hardly obtain effective redress when disputesoccurred due to the distance obstacle. Governments and international organizationsare making great efforts on the legislations and researching of how to supply effectiveprotection of distance consumers. The purpose of this paper is to find a suitableregime for China distance consumer protection, by analyzing and evaluating the mainmechanism what is popular in the world. The full text is composited by five chapters.The first chapter is the basement of the whole paper which is concentrate onprinciples of consumer protection; the second is the chapter about Escrow mechanismwhich is commonly spread in the distance consumer market in China; third chapterintroduces the Right of Withdrawal mechanism of EU; following chapter discussesthe dispute resolution mechanisms of distance consumer transaction; at last, theconclusion chapter makes every efforts on some feasibility suggestions to thelegislation of China distance consumer protection regime.Chapter1describes the brief introduction of distance consumer protection. Thefunction of this chapter is to lays down the fundament of this research, by defining thescope of subject, explicating the theoretical and practical basis as the fundament ofthis research. Starting with the analysis and interpretation of the definition of distanceconsumer, the paper analyzes the vulnerable position and status of consumers indistance transactions, which is the reason why governments and internationalorganizations are taking positive attitude in new legislations and measurements tosupply protection of distance consumers. Then to analyzes the justification and thetheoretical basis of distance consumer protection. This chapter concludes withsummarizing the development of existing mechanisms in the world.Chapter2analyses the Escrow mechanism which performances security functionof the distance consumer transactions. Escrow is not familiar with Chinese by its legal jargon, but is employed commonly in practice with the name of the Third PaymentMethod. The Third Payment Method first emerged in modern electronic commercerecently in China, while Escrow has more than500years history in common lawsystem. The author believes that the Third Payment Method Mode is Escrow bycomparing the legal natures of them, and the500years experiences of common lawcan supply a lot of valuable references of China to adopt the Escrow mechanism inour legislation. By analyzing Escrow’s operation, function and value, the authorpurposes that the credit of the Third Payment Method Mode is the core problem thatthe government should put more emphases to intervene in. The intervention includescharacteristic the Third Payment Method Mode into Escrow legal relationship andissue a particular Escrow law to safeguard the credit quantity what is free range anduncertain now.Chapter3concentrates on the consumer Right of withdrawal that acts asconsumer self-redress mechanism of distance contracts. Consumer Right ofWithdrawal is a distinguished representative of modern reform of contract law.There is no doubt that the right of withdrawal is one of the most significant symbolicdevelopments in modern law concerning consumer protection in recent half century.As a result of Directives, the Right of Withdrawal has been available to distanceconsumers within the EU for more than twenty years. This chapter put moreemphasize on the of systematized mechanism and theoretical perspectives rather thansimple terms of Right of Withdrawal, According to more than twenty yearsexperiences of EU legislations, it is clear that the mechanism will be led to a form offictitious articles without substantive effects, even if there is a little omit of the regime.Fortunately, EU has just passed a new legislation of Consumer Rights Directive at endof2011which is a unification of the Right of Withdrawal in EU directive system.The background of this new directive supplies us lots of valuable precedents to learn.Chapter4investigates the dispute resolution mechanism of distance consumercontracts. It’s a universal phenomenon that distance consumers are not able to geteffective redresses. Considering the virtual characters of distance consumer disputes,this chapter compares various existing dispute resolution mechanisms. Then fromglobal level, regional level and national level triple perspectives, try to figure out theproblems and reasons of those mechanisms. Among those, the author particularly evaluates that the Chargeback mechanism of USA. Chargeback is not only aneffective dispute resolution of distance consumer disputes, but also works to convertthe vulnerable position of consumer in contracts. Furthermore, the author proposed anew idea of CDR which is a tailored mechanism of distance consumer disputesresolution. In terms of CDR’s standards, the author believes that the Escrow ODR inChina is more valuable and worth promoting, rather than the approaches stipulated bylaw. Even though the author does not prefer courts to resolve the distance consumerdisputes, but private international law is concerning to the jurisdiction division ofevery countries. This chapter discusses the consumer protection from privateinternational law and concludes the trends of its development.Last chapter is the conclusion of this research. Different with the former chapterswhat are horizontal comparisons of the each mechanism, this chapter managed to dothe vertical comparisons of the entire distance consumer protection regimes of theworld three major economies. Then the author purpose that the most effective way ofempowerment of consumer is Payment Intermediary. This research concludes bysuggesting adopting the Right of Withdrawal mechanism as the basic principle ofChina distance consumer protection, and to hybrid the Escrow Payment Intermediaryas recent future legislation reform plan to security consumer transactions, to hybridthe Chargeback mechanism as long-term reform planning as well.