ncic-ch07

7E-commerce

The Internet, a giant computer network connecting millions of computers right around the world, is revolutionising the way people access information, organise their work and do business.

Advances in information communication technology (ICT) have reduced communication time and improved communication quality between distant users. This has allowed consumers to shop online, employees to telecommute — work from home — and businesses to market themselves globally.

It is estimated that by the year 2010 there will be approximately 4 billion Internet users worldwide.

focusOn completion of this chapter, you will have learned how to use theInternet for researching commercial and legal information, and buyingand selling goods and services.

outcomesA student can:5.2 Analyse the rights and responsibilities of individuals in a range of

consumer, financial, business, legal and employment contexts5.3 Examine the role of law in society5.4 Analyse key factors affecting commercial and legal decisions5.5 Evaluate options for solving commercial and legal problems and issues5.7 Research and assess commercial and legal information using a variety

of sources5.8 Explain commercial and legal information using a variety of forms5.9 Work independently and collaboratively to meet individual and

collective goals within specified timelines.

glossarycontract: a legally binding agreementcookie: a file that a web server stores on the user’s

computer when a website is visited. A cookie gathers information about a user

copyright: protects an author, artist, musician or publisher by giving them exclusive rights over their creation

cybermall: a virtual shopping malldefamation: unlawfully damaging a person’s reputatione-commerce: the buying and selling of information,

goods and services via the Internetencryption technology: scrambles your data as it travels

over the Internetescrow account: an account where a third party holds

money until goods are deliverede-tailer: electronic retailerezine: electronic magazinehot desking: when telecommuters need to visit the

office, they sit wherever they can find a deskhyperlink: a feature highlighted within a document that

triggers a link to another document, which may be located on another computer in some other part of the world

net investing: direct investor trading over the Internetphishing: the use of a fake bank website to elicit

customer’s account detailsportal: a website designed to offer a variety of Internet

services from a single convenient locationsearch engine: a program that gathers and sorts through

information on the Webspam: unsolicited email, usually advertising, which is sent

to a large number of peopletelecommuting: working from homeWorld Wide Web (the Web, WWW): a large-scale,

networked information system available over the Internet

New Concepts in Commerce168

7.1

The scope of e-commerceOver the last decade there has been an explosion inelectronic commerce, largely brought about by thedevelopment of the World Wide Web (WWW).E-commerce, the buying and selling of infor-mation, goods and services via the Internet, hasopened the door for businesses to sell direct toconsumers easily across national borders.

Today, consumers expect a business to have anonline presence. In response, more and more Aus-tralian businesses are using the Internet to cover allaspects of commercial transactions. All of Australia’slarge businesses report they have Internet sites andsmall and medium business connections to theInternet have increased rapidly since 1995.

Who would have anticipated the success ofelectronic retailers — e-tailers — such as Amazon,Yahoo! or ninemsn? There are now thousands ofAustralian and overseas e-tailers to choose from.

Using e-commerce for commercial purposesThere are two main types of e-commerce transaction.• Business-to-consumer (B2C). This covers products

and services sold or distributed over the Internet,with payment usually by credit card.

• Business-to-business (B2B). This covers a business’selectronic transactions with other businessesincluding paying bills, sending quotes and orderingsupplies.B2C is the most commonly used aspect of

e-commerce. With a few clicks of a mouse, consumersare able to buy just about anything they want.

The structure of the Web assists B2C and B2Belectronic commerce by providing businesses with amethod of marketing their goods and services ontheir databases. As well, they can sell data and,more importantly, sell processed information andknowledge. Consumers can also market their goodsand services to other consumers.

Apart from the buying and selling of goods andservices online, e-commerce is gradually being usedfor more traditional transactions such as:• researching commercial and legal information• taking orders online• conducting online banking transactions• offering training courses• providing customer service and support.

A search engine is a program that gathers and sorts through information on the Web.

Advantages and disadvantages of using the Internet for commercial purposesAdvantages• Instant access to a wide range of information sources

around the world• 24 hours a day, 7 days a week availability• Comparison shopping is made easier• Can access up-to-date information• Email makes follow-up contact easier• Faster and cheaper than traditional research methods• Information can be accessed at any convenient time• Information can combine text, graphics and pictures• Information can be easily stored for future reference• Businesses can sell to a worldwide market

Disadvantages• Not all businesses have a web presence• Sometimes there can be too much irrelevant

information on a site• Can be time wasting, due to inadequate search skills• Difficult to verify the accuracy and integrity of

information• Websites may not be regularly updated• Distractions caused by on-screen (pop-up)

advertisements• Information is inaccessible to those who are not online

or computer literate• Can sometimes be difficult to distinguish between

advertisements and articles• Cost of computer purchase and installation• Damage caused by viruses• Data overload

Australia and New Zealand’s Yahoo! Shopping home page is the e-tailer’s virtual front door.

E-commerce169

UNDERSTAND

1 What is meant by the term ‘e-commerce’?2 What do the letters ‘WWW’ represent?3 Distinguish between business-to-consumer and

business-to-business transactions.4 Select and explain three advantages and three

disadvantages of using the Internet for commercial purposes.

COMMUNICATE

5 In groups of three or four, brainstorm how e-commerce may affect:(a) Australian consumers(b) large retailers such as Woolworths and Coles

Myer(c) the Australian economy.Select a spokesperson to present your group’s ideas to the rest of the class.

6 In pairs, prepare a one-page report on the impact that the development of the Internet has had on:

(a) your life and the life of your family

(b) how you buy and sell goods and services.

You may wish to use a word-processing package to write the report.

E-LEARNING

7 Go to www.jaconline.com.au/commerce, click on weblinks and find five key websites in Australia and internationally that are used for commercial purposes.

8 To investigate the operation of an e-tailer online site use Jacaranda’s website — www.jaconline.com.au/commerce — select weblinks and click on the Yahoo! Australia and New Zealand Shopping Mall, Buy Guide and ninemsn shopping links for this textbook. Evaluate the three sites visited, reporting on:(a) ease of navigation(b) layout of the home page(c) methods of payment(d) ease of product selection(e) return and refund policy(f) delivery charges and

options.

INVESTIGATE

9 Use the library and the Internet to research and report changes to computer technology over the last ten years.

The advantages and disadvantages of using the Internet for commercial purposes.

Analyse a graphExamine the graph shown below.(a) What percentage of (i) small and (ii) medium

businesses were connected to the Internet in 2003?(b) What trend do these statistics reveal?

Small and medium businesses have rapidly gone online.

Co

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to

In

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et

(%)

Trends in Internet connections — Australia

100 Medium business

80

60

40

205%

9%

0

MAY

199

5

MAY

199

6

MAY

199

7

FEB 1

998

FEB 1

999

FEB 2

000

MAY

200

1

MAY

200

2

MAY

200

3

Small business

23%34%

65%

48%

83%

60%

89%

75%

95%

79%

95%

81%

98%

http://www.jaconline.com.au/commerce



7.2

Online shopping

Shop aroundVisit other sites and compare prices and product features to know exactly what you are buying. Prices should be clearly displayed and include all additional costs. There should be an easy to follow ordering process that gives you confirmation of your order. Check also the business’s:• refund and return policy• privacy policy• delivery methods and charges• stock availability.

The Web is revolutionising the way people shop. Ifyou have a personal computer and are connected tothe Internet, a whole new shopping experience isavailable to you. Most of the online shopping siteslet you view a description and usually a photo ofthe item for sale. Soon it may be possible to ‘try on’clothing using a virtual mirror or put on a virtualglove and ‘feel’ the tomato on the screen. Once anitem has been selected it can be placed in the vir-tual shopping trolley. The next step is to proceedthrough the virtual checkout where, after enteringsome personal and payment details, funds aretransferred from your account to the business’saccount.

Cybermalls Imagine shopping in a virtual mall — cybermall— from home, visiting different e-tailers andbuying almost anything from anywhere in theworld. Online shopping has become very popularover the last few years.

Those shoppers who are ‘time poor’ prefer theconvenience of shopping online. Other consumerslike being able to shop around for the cheapestprice or have the opportunity to select from a widerange of goods and services at a time that suitsthem. However, regardless of the reason for usingyour mouse rather than leaving your house, youshould be aware of some of the risks involved withonline shopping.

Online auctions are currently changing the face of e-commerce. The main operator of the global online auctions, ebay, charges a fee to anyone auctioning goods as well as a percentage of the sale.

Online shopping — shopping in the electronic age

Evaluate the business’s reputationLook for the business’s street address and phone number. Access consumer protection sites such as the Australian Competition and Consumer Commission and the US National Fraud Information Center, which highlight businesses that have poor reputations.

E-commerce171

Purchasing onlineIf you have never shopped online, ask your family and friends to recommend reliable sites. Otherwise, use a search engine to find e-tailers. You can limit your search to a particular product, brand name or country. Using a portal, a website designed to offer a variety of Internet

services from a single convenient location, to access an online shopping mall will provide a number of stores to choose from. However, you may be moved between sites without being aware of it, which can make it difficult to know which business you are dealing with.

Security of paymentOnly provide credit card details if the online store uses a secure payment system such as Secure Electronic Transaction (SET) or Secure Sockets Layer (SSL). These systems protect your personal and financial details by using encryption technology which scrambles your data as it travels over the Internet. To tell that a shopping site is secure, look for a:• locked padlock or an unbroken key in

the status bar at the bottom of the screen

• web address that begins with https:// instead of the normal htpp://.

Convert the price to Australian dollarsIf buying from an overseas e-tailer, make sure you convert the displayed price into Australian dollars. Also check if any import duty has to be paid.

Paying onlineMost Internet purchases have to be paid for by credit card when placing the order. However, some online stores accept debit card, money order or cheque. If you plan to frequently shop on the Internet, have a special credit card with a low limit that you only use for online shopping. Some credit card companies offer the protection of reversing the transaction if there is a disputed charge.


Consumer protection lawsThe Trade Practices Act 1974 (Cth) and the FairTrading Act 1987 (NSW) provide consumer protec-tion on purchases made from Australian and NewZealand e-tailers. Consequently, your consumerrights are protected when purchasing from thesebusinesses. However, if you buy something from ane-tailer located in another country, New SouthWales or Australian consumer protection laws maynot apply. Therefore, it could be very difficult toenforce these laws. In these cases, you need to con-tact the relevant consumer affairs department inthe country where the business is located.

Sites to searchIf you want to shop online, but are still a bit wary,there are two federal government sites operated bythe Consumer Affairs Division of the Department ofTreasury that provide useful information on a widerange of online shopping issues.1. Consumers online. This comprehensive site

provides a checklist which, if followed, will makeyour online shopping experience safer.

Important instructions to follow when shopping online

Ten things to check before shopping on the Internet

1 Know the business Know who the company is and their full street address.

2 Know the product Check it has a valid guarantee, is legal, and will work in Australia. Goods or services you receive should match their description.

3 Check the contract Understand and print out any terms and conditions. Check the due date and whether you need to be at home for the delivery.

4 Check the cost Look for extras like currency conversion charges, taxes, customs duties, delivery fees, packaging and posting. Note who pays for postage if the goods are returned.

5 Check for privacy Find out how your personal details will be used and decide whether you want them to be passed on to anyone else.

6 Confirm the order You should be given the chance to confirm or reject your order before you pay for it.

7 Keep records Print out your order before you send it and note any reference numbers.

8 Pay securely Use sites your browser recognises as secure — look for an unbroken key or padlock at the bottom of your screen. Don’t enter financial information that isn’t needed for the sale.

9 Resolve any problems Contact the trader about any problem as soon as possible. If unresolved, contact the relevant industry dispute scheme or your local consumer affairs or fair trading agency.

10 Look out for scams If something seems ‘too good to be true’ — it probably is.

2. Consumer PING. Consumer PING is a piece offree software developed to deliver to consumersinformation relevant to what they are viewingwhile shopping on the Internet. It detects whena consumer may need information, assemblesspecific information and delivers it immediatelyto the consumer before critical decisions aretaken.

Don’t go online shopping without your PING.

Consumer PING works by examining whatoccurs in an Internet browser window and thenbuilding a profile of what you are looking at on theInternet. It then checks this profile against a data-base of consumer information housed in the FederalTreasury and creates a package of information rel-evant to the profile. This information is then trans-mitted to the user in a pop-up window on thedesktop. Consumer PING will also allow the user torecord and organise online transactions and contactdetails.

When Consumer PING is launched it automati-cally checks whether more recent information isavailable on the Consumer PING database.Treasury’s database cannot be intercepted or usedby others without them having permission to accessthe database. The Treasury controls all data avail-able to Consumer PING. Consequently, it cannot beused as a marketing tool by other organisations.

Consumer PING is an anonymous download anddoes not request personal details of the user, therebyprotecting the user’s privacy.

Consumer PING is software that ‘pings’ a server to gather consumer information. Consequently, it became known as Consumer Personal Information Gatherer.

E-commerce173

Online auctionsOver the last few years, online auctions havebecome very popular with people looking forobscure items, bargains and collectables. Forexample, people can auction their collection ofmagazines, stamps or replica soldiers online andfind a buyer in Japan, Sweden or Brazil.

You need to realise that when you are buyingsomething via an Internet auction, you are notbuying from an auction house, such as eBay orYahoo, but from a business or individual who maynot be an honest, reputable dealer. The auctionhouses are simply providing a mechanism forpeople to trade with one another. They do not takeany responsibility for any loss you may suffer usingtheir services.

Once your bid has been accepted the payment forand delivery of your purchase is something you andthe seller have to work out. If the good is not whatyou thought you were buying, or if it does not arriveafter you have paid for it, then the auction house willnot refund your money. You need to contact the sellerand negotiate.

Online auctioneers are expanding their range of goods to keep buyers coming back.

To protect against fraudulent behaviour involving online auctions, some auction houses provide an escrow account facility. This is an account where a third party holds money until goods are delivered. Using this type of account both the buyer and the seller are protected.

UNDERSTAND

1 What is meant by the terms ‘e-tailer’ and ‘escrow account’?

2 How can you tell whether an online shopping site is secure?

3 How is shopping on the Internet:(i) similar to traditional shopping?(ii) different from traditional shopping?

4 How does the consumer PING site assist online shoppers?

5 Traditional shopping transactions involve a number of organisations in the supply chain:

Producer � Warehouse � Wholesaler � Retailer � Consumer. Draw a flow chart to show how an e-commerce

transaction could take place. You may wish to use a multimedia package to draw your flow chart.

6 What advice would you give to a friend who wants to purchase a pair of joggers from an overseas e-tailer?

E-LEARNING

7 Go to Jacaranda’s website — www.jaconline.com.au/commerce — select weblinks and access the Amazon link for this textbook. In what ways is this Internet site similar to visiting a store?

8 To find out more about consumer protection legislation in other countries go to www.jaconline.com.au/commerce, choose weblinks and click on the relevant link for this textbook.

9 The Australian Competition and Consumer Commission (ACCC) lists a number of questions that a consumer should ask before committing to an online purchase. Go to www.jaconline.com.au/commerce, select weblinks, access the ACCC’s link and list ten of these questions.

COMMUNICATE

10 Construct a web page for a business that sells custom-made surfboards. You may

wish to use FrontPage or a similar software package. Incorporate the features you have read about in this spread.

11 Using information in this spread to give you ideas, design a pamphlet aimed at high school students titled ‘The Dos and Don’ts of Online Shopping’. You may wish to use desktop publishing software to present the pamphlet with text and graphics. Display your pamphlets in the classroom.





7.3

Advice on consumer issues

Government computers

Non-government computers

KEY:

Australian Consumers’ Association <www.choice.com.au>

This fascinating site provides information and guidance about online shopping. Browse interesting articles from their magazine Choice. If you have the time, visit the ‘Shopping Online’ section.

Australian Competition and Consumer Commission <www.accc.gov.au>

Wondering about the consumer protection you have when you shop on the Net? This site will supply a lot of the answers.

NSW Fair Trading <www.fairtrading.nsw.gov.au>

This exciting destination provides you with advice on issues ranging from buying cars and bikes to shopping and credit. While here, why not try the ‘quick quiz’?

The Virtual Web Tour’s scenic sites

Government and non-government websites

econsumer <www.econsumer.gov>

Got a problem with something you bought on the Internet from another country? This site provides plenty of detail about international consumer advice and cross-border complaints.

Consumer Affairs Division, Department of Treasury <www.consumersonline.gov.au>

No e-tour would be complete without sampling the delights on offer at this exotic site. Plenty of ‘Fact Sheets’ to browse through. Help yourself to the e-pamphlets.

National Australia Bank <www.nab.com.au>

How can you make sure your private details will be protected from hacking? Not sure? Then detour into the ‘Secure Online Shopping’ area. The ‘Frequently Asked Questions’ (FAQs) are a great place to start.

Australian Customs Service <www.customs.gov.au>

This site will tell you whether customs duty will apply to your overseas Internet purchases. Watch out for these hidden costs. A ‘cheap’ overseas price may not be cheap after all.

Visa <www.visa.com.au>

Find out how to make a secure payment online using your credit card.

E-commerce175

UNDERSTAND

1 What is the benefit of the econsumer website to Australian consumers?

E-LEARNING

2 Access three of the government sites listed in the Virtual Web Tour.(a) Evaluate the usefulness of the advice given at

each site.(b) Which one was the most useful? Why?

3 Go to www.jaconline.com.au/commerce, select weblinks and access the Australian Consumers’ Association link for this textbook. What advice does this site provide regarding:(a) buying overseas? (b) delivery problems?(c) maintaining your privacy?

INVESTIGATE

4 Undertake some research on the Internet to locate any overseas e-tailers that have placed a notice to tell shoppers they may have to pay import duties in some countries. Report your findings to the rest of the class.

COMMUNICATE

5 Conduct a survey among your class members to determine:(a) how many have bought something

online(b) if they were satisfied or dissatisfied

with the ease of purchase. Why?(c) if the site was secure(d) if they accessed one of the

government sites before making their purchase.

6 As a class, discuss the following statement: ‘Although e-commerce has grown rapidly, customer service has worsened’. Brainstorm ways in which customer service on the Internet

can be improved.7 Go to www.jaconline.com.au/commerce,

choose weblinks and access the Consumers Online link for this textbook. Present a two-minute oral report based on the information contained in one of the ‘Fact Sheets’. You may wish to prepare this as a PowerPoint presentation.

8 In groups of three or four, design a poster aimed at 15- to 16-year-old students advertising some of the websites that

provide advice on e-commerce issues. You may wish to use desktop publishing software to present the poster with text and graphics.

WORKSHEETS

7.1 Exploring the Federal Government website

Australian Securities and Investments Commission <www.asic.gov.au>

The Commission is responsible for consumer protection in the financial services area. Transferring funds online should not be attempted without first exploring this site. While here, visit FIDO and read about the latest Internet scams.

Consumer PING <www.consumerping.gov.au>

This site is a ‘must see’. Consumer PING is a piece of free software designed to deliver information to you relevant to what you are viewing. Take a detour to their ‘e-seminar’ to discover what this site has to offer.

Ministerial Council on Consumer Affairs <www.consumer.gov.au>

Don’t let the name put you off. You can spend hours exploring this detailed site. The ‘e-seminar’ titled ‘Shopping in the Electronic Age’ is well worth exploring, as is the ‘Dos and Don’ts of Electronic Shopping’.

elcome to Virtual Web Tours. Thisexciting tour has been especiallydesigned for Commerce students who

want to investigate a range of governmentand non-government websites that provideadvice, useful tips and information on a widerange of e-commerce issues.

Read what W. Gates had to say about VirtualWeb Tours: ‘I recommend this tour for anyoneintending to shop online. Great information. Afascinating journey with plenty to keep youinterested.’

During your tour, you will be able to visit anumber of popular ‘e-advice’ sites. Take yourtime and discover what each one has tooffer. For those who want to explore the sitesin more depth, there are ‘e-courses’ and‘e-seminars’ available. Watch out for these asyou tour the sites. Sit back, relax and enjoyyour e-tour.




7.4

E-consumer protection issues

Consumer protection can be difficult to obtain in cross-border transactions.

Formation of a contractImagine you bought a CD from an e-tailer located in your state. This trans-action created a con-tract, a legally binding agreement, because there was:• an offer — you

offered to pay for the CD

• an acceptance — your offer was ‘accepted’ when the e-tailer took your money

• consideration — you and the e-tailer gained from the exchange.If the CD was faulty, state con-

sumer protection laws — in NSW, theFair Trading Act 1987 — would providea remedy. You would have the sameprotection as if you had bought the CD froman actual store. However, if you purchasedthe CD from an overseas e-tailer and it wasfaulty, then the situation is not so clear cut.For example, it may be difficult to:• determine from whom you bought the

CD • obtain proof of details of the transaction.

Websites can be created and removed inan instant. The use of hyperlinks (a feature high-lighted within a document that triggers the link toanother document, which may be located on anothercomputer in some other part of the world) confusesthe situation even further. The well-known com-merce saying ‘Let the buyer beware’ should now read‘On the Internet, let the buyer beware. But where?’

Countries are presently attempting to devise inter-national consumer protection laws. However, prob-lems are likely to continue to occur with cross-bordertransactions, especially when trying to determinewhich country’s laws apply and which country’scourts have the power to settle any dispute.

If you are in dispute with an overseas e-tailer, youneed to contact the relevant consumer affairsauthority in the country where the business is located.The Consumers International organisation has linksto many countries and is a good place to start.

Consumers International represents over 250 consumer organisations in 115 countries.

E-commerce177

How to avoid super-highway robbery1 Do not give personal financial details to anyone

you do not know or have not checked out.2 Do not be fooled by how professional a website

looks.3 Be wary of high-pressure sales tactics such as time

limits for special offers.4 Do not be fooled by any online hype.5 Remember that people on the Net are not always

what they seem.6 Do not respond to unsolicited emails.

Conduct of organisationsThe vast majority of businesses that operate onlineare reputable organisations that operate ethicallyand honestly. However, there are some who use theanonymity of the Internet to con people.

A recent survey conducted by Consumers International, a federation of more than 250 consumer organisations in 115 countries, found that consumers worldwide are at risk from misleading and inaccurate information when searching the Internet, especially finance and health websites. The WebCredibility project ‘found that it is difficult for consumers to evaluate the integrity, reliability and credibility of information sources on the Web’.

Internet offers — a web of deceit?

The Internet is a wonderful tool, but it has revived oldscams such as pyramid schemes, unsolicited business orinvestment offers and chain letters. Just type 'get richquick' into an Internet search engine and websites appearguaranteeing huge profits. Investment con artists andother fast-buck operators wasted no time in taking advan-tage of the mail and telephone to trick large numbers ofunsuspecting investors, now they've started to exploitcyberspace via the Internet.

The Internet makes it eveneasier for tricksters to hide,shut down or move on.Clever websites may looklegitimate and be more con-vincing than newspaperadvertisements making thesame false claims.

With a few keystrokes aNet Nasty reaches hun-dreds of thousands ofpeople through a singlemessage posted on theInternet. Internet scamsmay find you via youremail address. Just astricksters used the mail totout their schemes tounsuspecting people, sodo the new super-highwayrobbers. Treat unsolicitedInternet emails with thesame caution you wouldjunk mail.

Source: The little black book of scams, Office of Fair Trading,NSW

UNDERSTAND

1 List the three elements needed to establish a contract.

2 Why is it sometimes difficult to gain consumer protection when purchasing from an overseas e-tailer?

3 ‘All unsolicited emails should be treated the same as junk mail offers.’ Explain.

4 As a class, brainstorm the safety features you should look for on an e-tailer’s website.

E-LEARNING

5 Go to www.jaconline.com.au/commerce, select weblinks and access the Consumers International link for this textbook.

(a) What is the role of Consumers International?

(b) Prepare a two-minute presentation based on Consumers International’s ‘Top five tips for friendly advice and information on the Internet’. You may wish to prepare this as a PowerPoint presentation.

6 Access www.jaconline.com.au/commerce, select weblinks and go to the United States National Fraud Information Center link for this textbook. What is the role of this organisation?

7 To find out more about scams on the Internet, go to www.jaconline.com.au/commerce, choose weblinks and access the Scamwatch link for this textbook.

INVESTIGATE

8 In groups of three or four, use the library, newspapers and the Internet to find two examples of cross-border contract disputes involving the Internet. Prepare a half-page report on each example. You may wish to use desktop publishing software to present the report with text and graphics.

WORKSHEETS

7.2 Online shopping and ‘scams’





7.5

Financial servicesAccessing practical information and servicesMost Australian financial institutions — banks,building societies, credit unions, insurance com-panies and stock exchanges — have an online pres-ence. They offer a wide range of informationwhether you are a customer or not.

Australian Financial Services DirectoryCurrently Australia’s largest collection of onlinefinancial resources, this site allows you to accessnumerous financial institutions within Australia andworldwide. The extensive directory provides links tobanks, funds managers, Australian publicly listedcompanies, stock market reports and much more.

This site provides links to numerous financial institutions.

Online share markets — Net investingWould you like to do your own share trading online?If so, one of the most important financial sites to visitis the Australian Stock Exchange (ASX). Here youwill find practical financial information including:• what the stock market is and how it works• a glossary of financial terms• a ‘Step by Step Guide to Investing in Shares’• how to conduct online trading — Net investing.

Net investing is direct investor trading over theInternet. An investor can access a website with adirect investment facility from one of the larger dis-count online brokers such as CommSec or any majorbank, and then buy and sell shares.

The All Ordinaries Index is the main daily measure of how the Australian stock market has performed.

The ASX site provides practical information about share trading.

Bill payment — Electronic Payment System (EPS)Consumers today rarely carry large amounts of cash.Technology has developed alternative methods oftransferring funds from customers to businesses.• BPAY®: This is an automated bill-paying system

that allows customers to pay bills via telephone(mobile or landline) or Internet. Through theBPAY View service, customers can also see theirbills online through a secure Internet site.

• Electronic Funds Transfer at Point of Sale(EFTPOS): The use of EFTPOS has increased inrecent years, and banks encourage this trend bycharging a lower fee for EFTPOS while shoppingfor groceries and to withdraw extra cash if needed.

Internet bankingBanking on the Internet allows you to bank any-where in the world, whenever you want. It is quickerand cheaper than traditional banking. It can savetime and money and allows you greater control ofyour finances. At the click of a mouse or touch of abutton, you can:• pay bills• open a new account• access existing accounts• transfer funds between linked accounts• check balances.

However, Internet banking does have a numberof drawbacks, including:• you have to do more of the work yourself• you need access to a computer• the possibility of Internet fraud.

E-commerce179

The Internet has revolutionised the way we do our banking.

Public computer warning on Internet banking

Police were investigating a theft from a major Australian bankin which a criminal used a virus to access a bank customer’scomputer, Australian Hi-Tech Crime Centre director AlastairMacGibbon said.

Such viruses, known as Trojans, can be downloaded whilesurfing the Internet or from an email attachment and they stealpasswords for Internet banking.

All major Australian banks had fallen victim to a fraudknown as phishing where criminals use fake bank websitesto elicit customers’ account details, he said.

Mr MacGibbon said Internet banking remained as safe asother forms of banking as long as customers were cautious.

‘Customers need to exercise the same precautions online asthey would in the real world,’ Mr MacGibbon said.

‘Don’t give your passwords away to people when they askfor them, don’t respond to emails you receive asking forbanking passwords.

‘Make sure that your computer has up-to-date viruscheckers and has up-to-date firewalls.

‘Ensure when you are doing Internet banking that you don’tdo it from something like an Internet cafe; don’t do it from apublic library; do it from a home or office where you’re sure ofthe type of software loaded up to protect yourself.’

Source: Sydney Morning Herald, 9 January 2004

A password is only secure if it is chosen carefully. Many people choose their names, their birthdates or even a telephone number. Each of these types of password can be found by clever hackers who send random search messages over the Internet, hoping to break into sites where simple passwords like these have been used.

UNDERSTAND

1 Explain what is meant by the following terms:(a) ASX(b) BPAY(c) EFTPOS.

2 Read the article on this page. What safety precautions should you use when banking online?

3 In your own words, explain how Net investing works.

4 Although banking and paying bills via the Internet is very convenient, what problems might result in terms of customer privacy and security?

5 In what ways are banks encouraging customers to use EFTPOS rather than over-the-counter transactions?

6 How might older people and the poor be disadvantaged if over-the-counter transactions attract a high fee but Internet banking is less expensive in terms of the bank fees payable?

7 Identify the main advantages and disadvantages of Internet banking.

E-LEARNING

8 Go to www.jaconline.com.au/commerce, choose weblinks and access the Australian Financial Services Directory link. Take the ‘Site Tour’ and list ten financial categories that can be found at this site.

9 Use Jacaranda’s website — www.jaconline.com.au/commerce — select weblinks and access the Australian Stock Exchange link. List the steps required to conduct online trading.

COMMUNICATE

10 In groups of three or four, imagine yourselves living in the year 2050. You are to develop a concept for how you think banking will operate at this time.

Be as creative as possible and remember that, in the 1980s, banks were handwriting balances in paperback passbooks. We have come such a long way in 30 years; where will we be in another 45 years?

11 Draw a cartoon that could be used in the article on this page.

WORKSHEETS

7.3 Financial institutions and online security




7.6

Laws relating to young people using e-commerceInformation and advice on issues important to young peopleThe Internet has changed the way people accessinformation. It has also dramatically increased theamount of information available. The Internetoffers people access to a wealth of government,legal, financial and consumer information, withnew sites being created each month.

Accessing information via the Internet may saveyou hours of waiting on the telephone and provideyou with the most current data. The Internet isoften seen as a one-stop-shop for information.However, much of the data on the Internet ispoorly organised, so you need to develop searchingskills to efficiently locate what you need. Much ofthe information is also unfiltered, making itimportant to evaluate its validity, reliability andauthenticity.

Once you have your favourite websites book-marked, it is a good idea to visit them every coupleof months. This lets you see what new informationis available.

Government youth-related websites‘The Source’ is the Federal Government’s youthwebsite. It is easy to navigate and provides accessto ezines — electronic magazines — dedicated tocurrent youth topics.

Youth.NSW is the state government’s website foryoung people, which provides links to informationabout issues, services and activities.

These sites provide enough background materialso that you know which questions to ask. This makesyour Internet searching more meaningful. They alsocontain numerous links to other websites.

Privacy, defamation and copyright lawsThe rapid expansion of the Internet, the pro-liferation of websites, the enormous volume of

What type of Net surfer are you? ‘Click Surfer’: easily distracted, quickly clicSurfer’: clear goals about what you want to find out.

Youth.NSW — home page

E-commerce181

information and the range of topics all pose prob-lems for lawmakers. Of major concern is protectingthe individual’s rights to privacy, the creator’srights to copyright and people’s reputations fromdefamation. 1. Privacy: Transactions on the Internet can leave

their own trail that can be followed andrecorded. For example, a web server can send aprogram called a cookie over the Internet to beplaced on the searcher’s hard drive without per-mission or notification. The information col-lected about the searcher’s pattern of usagecould be accessible to other businesses. Thiscould be seen as a breach of privacy.

The Commonwealth Privacy Act 1990 providesprivacy safeguards that federal governmentdepartments and credit providers must observe,but private businesses remain unregulated.

2. Defamation: Imagine you sent an email orattachment that contained information likely todamage the reputation of another person. If themessage is ‘published’ to a third party, evenaccidentally, then you could be the subject of adefamation claim under NSW laws. Alterna-tively, if you ‘published’ a defamatory article onthe Internet, then you could face a potentiallycostly defamation claim. Currently, defamationon the Internet is an issue receiving worldwideattention and discussion.

3. Copyright: Copyright protects an author,artist, musician or publisher by giving themexclusive rights over their creation. Interna-tional treaties such as the Berne Convention orthe Universal Copyright Convention give someprotection to Australian copyright owners over-seas and vice versa. However, preventing anyinfringements can be quite difficult, with somesignatories to the conventions adopting a verylax attitude.

Copyright protection was at the centre of asuccessful court case recently brought by theAustralian Recording Industry Association(ARIA) against a number of university studentswho operated a music sharing website. The web-site was subsequently closed down and thestudents fined.

SpamSpam is unsolicited email, usually some type ofadvertising material, which is sent to a largenumber of people. It is the online equivalent of junkmail.

Spam is a serious worldwide problem for thefollowing reasons:• The material contained in some spam messages

can be offensive, such as material that is raciallybiased or intended to incite violence against aparticular group or community.

UNDERSTAND

1 Why should you regularly update your bookmarked websites?

2 What is meant by the term ‘ezine’?3 Unscramble the following words and use them in a

sentence to explain their meaning:(a) cypvira(b) nmfdaeiato(c) prygtihoc.

COMMUNICATE

4 In groups of three or four, brainstorm the advantages and disadvantages of using the Internet to research youth-related issues. Choose a spokesperson to share the group’s comments with the rest of the class.

5 Imagine the Federal Government has asked you to design a creative poster aimed at high school students to publicise The Source website. You may wish to use computer graphics software to design the poster. Display your posters in the classroom.

E-LEARNING

6 Go to www.jaconline.com.au/commerce, select weblinks and access The Source link for this textbook. Select a topic from an ezine that interests you. Present a two-minute oral report based on the article.

7 Go to www.jaconline.com.au/commerce, choose weblinks and access the Youth.NSW link.(a) What is the role of the ‘Youth Advisory Council’?(b) What changes, if any, would you make to this

site? Why?

WORKSHEETS

7.4 Youth and e-commerce

• Sometimes it can advertise products that may beillegal in Australia.

• It is cluttering the email system, reducing itseffectiveness as a communications tool.

• It may promote websites that are totally inappro-priate for young children.To restrict the growth of spam, the Australian

Government passed legislation, the Spam Act 2003,to enable the courts to prosecute individuals andcompanies if they are found guilty of generatingspam. However, because a lot of spam is generatedin other countries, the government is also workingto develop international agreements on spam.

Check with your Internet Service Provider (ISP) to see if it offers a spam blocking service. This can help reduce the amount of junk coming into your account.




7.7

Workplace issuesWorking from home — telecommutingTelecommuting meansworking from home.Instead of travelling to theworkplace every day,employees can ‘telecom-mute’ using electronictechnology, especially thepersonal computer. Port-able notebook computersand other hand-held com-munication devices havemade the virtual office areality for some workers.

The Internet has made telecommuting possible.

Rights and responsibilities of telecommuters

Rights of telecommutersResponsibilities of

telecommuters

1. Employer-provided

telecommunications

equipment.

2. Some flexibility in

determining the work

schedule.

3. Access to training and

development courses.

4. Opportunities for promotion.

5. Provision of policies on the

use of the Internet.

6. Compensation for work-

related expenses.

7. Support of supervisor or

manager.

8. Provision of full technical

support.

9. The encouragement and

support of colleagues.

10. An appropriate work/life

balance.

1. Work the number of agreed

hours.

2. Make the home ‘work’

environment meet the

minimum health and safety

standards.

3. Do not use company

resources for personal

purposes.

4. Abide by the company’s

policies on the use of the

Internet.

5. Maintain the security and

privacy of transactions over

the Internet.

6. Ensure telecommunication

equipment’s safety by

providing security locks and

fire extinguisher.

7. Protect home-based computer

from viruses.

8. Maintain security of any

passwords and software.

In Australia, about 450 000 people telecommute, which is about 5 per cent of the workforce. One method adopted by some businesses is called ‘hot

desking’ — when telecommuters need to visit the office, they sit wherever they can find a desk.

Hi, I’m Isabel Aitken.

I used to commute more than three hours each day to and from Gemline’s Sydney head office. I have now reduced that to about 15 seconds.

With the assistance of Gemline — they paid for the personal computer, ISDN line, modem, fax machine and multifunction centre — and a spare room at home, I have turned my daily commute into a telecommute. This has given me back my life. I feel more in control of my work schedule. I like the flexibility the new arrangements give me and I can work in comfortable surroundings.

There are a few downsides to telecommuting, especially the lack of direct contact with other employees. Email and phone calls are therefore important as they let me keep in touch with what is happening at the office. Also, because the projects I am completing are at home, I tend to work more hours than if I left my work at the office. However, these are minor compared to the hassles of rush hour and constant travelling.

‘Telecommuting has given me back my life’

‘Telecommuting has given me back my life’

E-commerce183

PrivacyTelecommuters will have their work performancemonitored. This could involve monitoring telephoneconversations, Internet transactions, keystrokes,Web hits or completion time. Some people arguethat monitoring to this extent is an invasion ofprivacy. Others say that monitoring is necessary toprovide feedback for the employee.

In recent court cases, it has been shown that per-sonal emails sent by employees using the business’sfacilities can be accessed and read by managementand that this is not an invasion of an employee’sprivacy.

Guidelines on workplace Web browsing and emailsCurrently, there is widespread concern in the work-place about the use of the Internet by employees forWeb browsing and the sending of personal emails.To overcome this problem, many businesses havedeveloped a set of guidelines that set out acceptableuses of the Internet. All employees are expected tofollow these guidelines.

Web browsing in the workplace

In January 2002, 1 message in 125 was spam. By October 2003, this had increased to 1 in 2.

UNDERSTAND

1 What is meant by the term ‘telecommute’?2 List four types of technological communications

used by a telecommuter.3 A recent survey revealed that ‘hot desking’ is very

unpopular with the majority of telecommuters. Why do you think this is? Share your answer with other class members.

4 Imagine your school has agreed to let you telecommute all your lessons for the rest of the year. Identify the advantages and disadvantages of working from home.

INVESTIGATE

5 In groups of three or four, use the library, newspapers and the Internet to research the growth in telecommuting in Australia over the last decade. Present your research to the rest of the class. You may wish to prepare this as a PowerPoint presentation.

COMMUNICATE

6 Examine the cartoon on the left. In groups of three or four, develop a set of guidelines on workplace Web browsing and email usage. You may wish to use a word-processing package to write the guidelines. Display your guidelines in the classroom.

7 In pairs:(a) Devise a method of ensuring

that a telecommuter’s rights and responsibilities are clearly communicated to all employees.

(b) Explain why it can sometimes be difficult to enforce a telecommuter’s rights and responsibilities.

8 Set up a class debate to consider the following topic: ‘Monitoring an employee’s use of the Internet is an invasion of their privacy’.

Share roles so that those not debating are involved either in assisting with research or in running the debate and keeping notes on the arguments on both sides.

9 Design a poster highlighting a telecommuter’s rights. You may wish to use computer graphics software to design the poster.

WORKSHEETS

7.5 Topic test — e-commerce

ncic-ch07

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