Consumer Union to Rank Site Disclosures

Non-profit publisher Consumer Union is putting its considerable clout behind a new effort to encourage Web sites’ full disclosure of privacy and advertising policies — and is launching a new unit to rank their willingness.

The Yonkers, N.Y.-based firm, best known as the publisher of Consumer Reports magazine, has launched a new unit, ConsumerWebWatch.org, which is charged with elucidating shortcomings in Web sites’ online disclosure through a ranking system, much like that used by its offline sibling.

CU said the move stemmed from concern over a lack of wide online disclosure, which the group said is hurting the online retail and publishing industry, in addition to consumers’ ability to get credible information from the Web.

The group recently commissioned Princeton Survey Research Associates to conduct a survey of 1,500 adult Internet, only 29 percent of whom said they trusted the information found on Web sites.

Yet 80 percent of the respondents said they considered it “very important” to be able to trust the information on a commerce site, while 59 percent said it is “very important” that advertising be clearly labeled and distinguishable from editorial content.

At the same time, 60 percent of respondents were unaware that some popular search engines use paid placement, while 80 percent demand clear disclosure of such practices.

“As consumers settle into the realities of a world where the Internet has changed many aspects of how they live their lives, they are starting to question more and more how much they should trust Web content,” said Consumer WebWatch Director Beau Brendler. “Using the Web should not be a game of 20 questions. Consumer WebWatch will encourage sites to be more transparent about the financial interests behind the content they publish, and provide tools to help consumers feel more confident about using the Web.”

ConsumerWebWatch said it would rely on a set of guidelines drawn from the survey’s findings to determine whether sites are adequately meeting consumers’ needs for disclosure.

According to the group, sites will receive high marks for disclosures made easily available — such as on their “About Us” page — and if they:

• Provide valid information on the site’s location, contact information, corporate ownership and mission;
• Detail advertising and sponsorship practices (including pay-for-placement search, affiliate links and house ads), and clearly differentiate ads from editorial content;
• List of all fees, service charges and return policies before a user initiates an order;
• Offer an easy-to-read privacy policy, disclosing how visitor and customer personal information is used, whether it uses browser-tracking mechanisms, and simple procedures for opting out.

ConsumerWebWatch, which is funded by grants from the Pew Charitable Trusts, the John S. and James L. Knight Foundation, and the Open Society Institute, said it plans to adopt the ratings system of its offline and online sister properties, which include ConsumerReports.org.

While the effort has high-profile backing and a relationship with CU, ConsumerWebWatch isn’t the first to try such a thing. It follows on the heels of a number of earlier attempts to develop an Internet-wide rating or seal-of-approval system for Web sites’ privacy policies.

Groups like the Better Business Bureau have made limited headway in the space, as has TRUSTe, which has about 2,000 sites participating in its seal program. TRUSTe, despite being co-founded by an executive director of civil liberties group Electronic Freedom Foundation, also has come under criticism by consumer advocates for its close ties to (and sponsorship by) giants in the online publishing, retail and advertising industries.

The news also follows the recent debacle over a decision by Yahoo , a TRUSTe-certified site, to alter some of its privacy policies and change its users’ opt-out marketing preferences.