Case of Online Supplier Fraud

According to The Star online news (2016, September 6), there is a group of students being scammed by an online supplier with a total amount of RM1 million. The online supplier sells the smartphones for this group of students at very cheap price and then these students resell the phone to their friends.

One of the victims Natasha said she got to know the supplier through the mobile application WeChat. Natasha said that the products shown to her looked authentic but were sold below the market price. 

The supplier asked those students to pre-order the cheap smartphones. After several orders and good response from customers, this group of students handed the supplier about RM45,000. In July, the business ran into a problem when the supplier said there was no more stock and did not entertain their calls. The case goes worse when they realise the supplier deactivated the website and could no longer be reached. They had handed few hundred thousand to that online supplier and threaten by their customers now because they are unable to return the money for customers. 

“There are a lot of newspaper reports and victims share their story of online purchase fraud to create public awareness. However, people still easily fall in this type of scam due to the cheaper price offered by the seller. The online business environment and advance in technology make those authorities difficult to track all these types of scams. In order to avoid these scams, consumers self-regulatory is very important.”

Source: 

Ng, S. & Rahim, R. (2016). Students left in the lurch after phone deal goes sour - Nation | The Star Online. Thestar.com.my. Retrieved 10 September 2016, from http://www.thestar.com.my/news/nation/2016/09/06/students-left-in-the-lurch-after-phone-deal-goes-sour/     

Fraud Case of A Baby Stroller

Here is a real case scenario of a housewife that happened to buy a baby stroller from an online seller on Facebook. 

The stroller was sold in a comparatively cheap price, and seller also offers a friendly service by being responsive towards messages from customers. Apparently, the Facebook page has over thousands of "Likes" too. Hence, the housewife sort of trusted the seller as genuine and proceeded with a full payment.

As the seller promised, the stroller would arrive in a week or two. After weeks of waiting, the stroller still hasn't arrived. At first, the seller claimed it was stucked at the customs, few days later claimed it'll arrive in a couple of days time. After another week passed, still no news from the seller. The buyer then called, texted the seller through Whatsapp and Facebook, yet there is no response at all. The seller still actively updates her Facebook page, reply to other buyers' comments, but solely ignores the housewife's messages. Messages posted on the wall of the Facebook page has also been deleted by the seller. 

The housewife started to sense something isn't going right and asked for a refund. Below are some of the snapshots posted by the buyer from the conversation with the seller.

Part 1: 
Buyer asked for refund, seller threatens that she would delay the refund if buyer continues to spread negative word about her business on Facebook.   

Part 2:

Seller mentioned to release a summon against the buyer for defamation.  

After weeks of disputes, the buyer decided to lodge a report to the Consumer Claims Tribunal by showing all the transaction details, threatening text messages from the seller as proofs. The seller then was intimidated and refunded back the money to the buyer. 

"It is a wise decision for the housewife to raise her case to the ears of the Consumer Claims Tribunal court instead of continuing the disputes with the seller. The seller couldn't sue the housewife for defamation because firstly, the seller isn't a public figure, even though posts were made to rant about the dissatisfaction, however the housewife didn't disclose the name, picture or any direct information about the seller. Those comments were also truths and facts on how the seller has been reacting towards the case. It is important especially being a buyer                                  to fight for our rights when we know we have been scammed."

Legal Protection for Online Shoppers Part2

Consumers need to be protected from unfair trade practices such as the sale of defective products, false advertisement, false description of goods, misleading price and etc. Those consumer protection laws should evolve with the innovation of ICT.

Consumer Protection Act 1999 was amended in 2007 to cover electronic commerce transactions. This act protects consumers from misleading and deceptive conduct, unfair trade practices and false representation.  

Section 187 to 204 of Communications and Multimedia Act 1998 contains provisions on consumer protection. The provisions make it obligatory for network facilities or service providers to deal reasonably with consumers and adequately address consumer complaints (Jayabalan, 2012). 

Electronic Commerce Act 2006 merely provides legal recognition of electronic messages in commercial transactions, the use of the electronic messages to fulfil legal requirements and to enable and facilitate commercial transactions through the use of electronic means (Amin & Nor, 2013). The enactment of this act is to follow suit in implementing the UNCITRAL model law. However, this act does not cover consumer protection.

“In my opinion, Electronic Commerce Act should contain the provision on the safety of electronic transactions to protect consumers. Although cyber laws and consumer protection law have been enacted in Malaysia in line with the development of the cyberspace but exploitation of consumer’s vulnerability to unfair trade practices continues. Other than laws that protect consumers, there should have more legislation to govern online sellers. Authorities need to ensure the credibility of the online sellers. All the online sellers must follow the Consumer protection (electronic trade transactions) regulations 2012. 

Sources: 
1. Amin, N. & Nor, R. (2013). Online shopping in Malaysia: Legal Protection for E-consumers. European Journal Of Business And Management, Vol.5(No.24).
2. Jayabalan, S. (2012). E-Commerce and Consumer Protection: The Importance of Legislative Measures. 16 JUUM 93 – 101.

Legal Protection for Online Shoppers Part1

Have you shopped online before? Are you feeling safe when shopping online? We would like to share some legal information for online shoppers. 

Computer Crimes Act 1997 (CCA) addressed offences relating to unauthorised access, unauthorised modifications and wrongful communication. To some extents, CCA protects online shoppers with regard to a security of online payment.

As consumers shop online, their personal information is easily misused by the third party. Personal Data Protection Act 2010 regulates the processing of personal data involved in commercial transactions. This act protects individual personal data from being processed or disclosed without the person’s consent. 

Digital Signature Act 1997 protects consumers by providing a means for secure online transactions by using digital signatures.

There are more laws and regulations that protect online consumers will update in next post. Please stay tuned. 

“Consumers unable examine the products when they buy online. They are more vulnerable compared to traditional buyers. Thus, laws and regulations that govern online market are very important to protect consumers. The borderless online business environment makes the implementation of laws become more difficult. The local law may not be sufficient to protect consumers from cross-border online transactions. Therefore, harmonisation of legal standards among countries is important to ensure adequate protection for 
the consumers and increase consumer confidence when shopping online.”

1st September 2016 - Malaysia's First Special Cyber Court Activated Today

According to The Star online news (2016, September 1), Malaysia's first special cyber court is in operation to handle the increasing number of cyber offences. This cyber court would handle cyber offences such as bank fraud, hacking, defamation, cyber spying, online gambling, document falsification and pornography. Minister in Prime Minister's Department Datuk Seri Azalina Othman said the court is equipped with facilities to function as an e-court complete with technology-savvy judges and prosecutors. 27 judges have sent for training to enhance their knowledge and understanding of the technological tools involved in the courts. According to her, cyber courts will be set up in other states later.

" In my opinion, authorities need have a very clear direction on what type of cases will handle by this special cyber court as some cases may involve both online and offline offences. Judges, prosecutors and legal practitioners involved in the case must keep improving their Information Technology knowledge and expertise in computer forensic. Last but not least, Malaysia should strengthen the current cyber law to protect all online users from cyber crimes. "

Source:
Sira, H. (2016, September 1). Special court to handle cyber crimes cases ready for use. The Star. Retrieved from http://www.thestar.com.my/news/nation/2016/09/01/first-cyber-court-in-jalan-duta-activated/

Types of Online Shopping Fraud - Scenario 2

The above scenario shows that a buyer purchases a box of large fairy house bricks block online for her nephews and niece. The buyer is happy that the product delivers on time and the box is same with the one that displayed online. However, when her nephews and niece did assemble the bricks block, they just realise it is totally different with the one that described online. 

The buyer seeks for an exchange of the product but she just realises that there is a term and condition stated “all goods sold are not returnable or exchangeable” under any circumstances. She feels being cheated by the seller.   

“It is an offence under Trade Description Act 2011 section 5(1)(a) any person who applies a false trade description to any goods; (b) supplies or offers to supply any goods to which a false trade description is applied shall be liable to a fine not exceeding one hundred thousand ringgit or to imprisonment for a term not exceeding three years or both if such person is not body corporate.

Those terms and conditions that imposed by online traders may not favourable to consumers. The statement that “all goods sold are not returnable or exchangeable” will blind consumers and they are unable to claim any rights in cases of defective goods and unsatisfactory goods. Consumers must aware all the terms and conditions stated on the website before they purchase."

Special credits to:
Online buyer (victim): Teo Geok Cheng (Sukie)
Nephew 1: Lim Yong Han
Nephew 2: Lim Yong Seng
Niece: Lim Shi Ya
Courier staff: Cheah Zi Yik
Photographer: Teo Geok Hong & Cheah Zi Yik
Cartoon effect editor: http://www.cartoonize.net/

Types of Online Shopping Fraud - Scenario 1

The above picture illustrates a buyer being scammed online. The seller, who is an online scammer, wished to earn quick money through selling products online. He posted a picture of an ipad, selling at a very cheap price. The girl above in the picture, happened to browse the Internet and her attention was drew at the ipad being sold. She was attracted as the selling price was so much more cheaper than it's being sold elsewhere. Without further consideration or hesitation, she decided to purchase the ipad and made the payment online to the seller. The item was expected to arrive in three days time as stated in the website.

One week has passed, the ipad still did not arrive at her doorstep. Hence, she decided to check the delivery status and wanted to contact the seller online. Unfortunately, when she log on to the website, it was displayed that the website is no longer available and does not exist. She then came to realize that she was actually being scammed, however it was too late!

Does the above situation seemed familiar to you? 

Were you one of the victim as above? 

It is common that as consumers, we often get attracted to attractive deals, or fall prey to several types of scams without realizing. We must learn to be a smart shopper online, do not make purchase from untrusted websites, especially those selling counterfeit products with super low prices, and check if the website is legally registered. DO NOT purchase if any of the information online seems fishy to you. It is advisable to select the option of "cash on delivery" payment mode if available, instead of paying it online directly before the arrival of goods. Preventive measures are vital to ensure that we do not fall prey to fabricated websites easily.

Do not be easily lured by discounts!
Let us all together, be a smart shopper online!

Special credits to:
Online seller (scammer): Cheong Zhen Fui (Nick)
Online buyer (victim): Michelle Anne Minjoot
Photographer: Teo Geok Cheng (Sukie)
Cartoon effect editor: http://www.cartoonize.net/