As inflation rises, more Malaysians risk money on online deals
Unlike buying from physical stores, online shopping is more risky due to various scams and bogus e-commerce merchants.
In Terengganu last year, six people were duped by bogus e-merchants on the promise of getting cheap second-hand cars – a trend which consumer watchdogs fear will become more frequent as awareness on safe surfing does not keep up with the increasing number of people who go online to hunt for bargains.
According to the National Consumer Complaints Centre (NCCC), complaints related to e-commerce and online businesses are the fastest growing type of complaints it receives among 20 sectors, which range from household appliances to tourism and food services.
As cash-strapped consumers hunt online for the best deals – which include houses as well as cars – NCCC officials worry that they will fuel the growth of more unscrupulous traders.
NCCC also feels that lax enforcement by Putrajaya is allowing the legitimate e-merchants to get away with bad behaviour such as false advertising of products and late deliveries.
The most worrying part, said the Federation of Malaysian Consumers Associations (Fomca) secretary-general Datuk Paul Selvaraj, was that unlike regular traders who opened a physical shop or a company, crooked online traders were near impossible to catch.
“With technology moving this fast, it is almost impossible for us to keep up,” Selvaraj said, on the ability of consumer groups to help consumers deal with e-commerce cheats.
“The burden (when dealing with e-commerce) is shifted more to consumers to make the right choice and protect themselves,” he told The Malaysian Insider on the sidelines of the launch of NCCC’s complaints annual report in Kuala Lumpur on Tuesday.
Bogus e-commerce merchants are different from the typical Casanova scam or the prize-winning trap that Malaysians keep reading about in the media, where people are duped into giving up money with the promise of getting more.
In these cases, shady merchants actually put up advertisements of things for sale, usually at dirt-cheap prices.
NCCC legal executive Santhosh Kannan believes the popularity of e-commerce has shot up in the past two to three years in tandem with bargain websites such as Groupon, MyDeal and LivingSocial.
According to NCCC’s 2013 report, complaints on online merchants have jumped to 3,712 from 874 in 2012.
Also, e-commerce complaints outnumbered the complaints received about physical retailers, which stood at 2,051 last year.
“This shows that consumers prefer to purchase online despite knowing that they are vulnerable to scams and various problems related to online purchases,” the report said.
The NCCC is a non-profit group that helps consumers and traders handle disputes over goods and services.
NCCC legal executive Santhosh Kannan said although the body only started collecting complaints about e-commerce two years ago, grouses already outnumbered those on non-online retailers.
“With normal shops you can actually see what you are buying, but it’s different online,” Santhosh said adding that consumers were still prepared to risk their money because online goods are cheap.
Most of the complaints the NCCC received were on late delivery of goods ordered (47.2%), followed by product disputes (20%).
“Product disputes involve issues such as goods being different than what was advertised, lacking in features and product defects,” the report said.
About 15.6% of complaints were on scams where people lost money, 13.6% on bad customer service and 3.6% on over-pricing and fee disputes.
Although late delivery may on the surface appear a minor nuisance, it can be considered a breach of contract between trader and customer, said Santhosh.
“Customers order and would need to use a certain product by a certain date.
A retailer who is ordering from a wholesaler, for instance, would lose money if he is late in getting his goods to market.
” Despite the steady rise in e-commerce, he said, the Malaysian authorities have not been doing enough to ensure that businesses follow best practices and go after cheats.
“Now we even have people selling on Facebook which is very dangerous because they can just close down the site at any time and disappear with people’s money,” said Santhosh.
Selvaraj believes that because this form of commerce is becoming increasingly popular due to convenience and low prices, the government has no choice but to start taking them seriously.
As the cost of living goes up, consumers would be forced to look for ways to save money on everything, including shopping online where prices are lower.
“Merchants must be made to register their businesses with the Companies Commission of Malaysia and the government must take sterner action against those who refuse to register,” said Selvaraj.
There are a slew of measures under the Consumer Protection Act 1999 that the government can take to act against unscrupulous online merchants but the rub is in the enforcement, he said.
The authorities and the online business community should also develop a certification system to help guide consumers to trustworthy sites.
"There should also be more awareness campaigns on how to shop online safely and what to do when there is a dispute," said Selvaraj.
But at the end of the day, unlike regular shops, where there is a physical business that can be raided, the anonymity provided by the Internet makes it hard to catch bogus merchants.
“Right now, the best is for consumers to protect themselves,” he said.
– June 27, 2014.
Unlike buying from physical stores, online shopping is more risky due to various scams and bogus e-commerce merchants.
In Terengganu last year, six people were duped by bogus e-merchants on the promise of getting cheap second-hand cars – a trend which consumer watchdogs fear will become more frequent as awareness on safe surfing does not keep up with the increasing number of people who go online to hunt for bargains.
According to the National Consumer Complaints Centre (NCCC), complaints related to e-commerce and online businesses are the fastest growing type of complaints it receives among 20 sectors, which range from household appliances to tourism and food services.
As cash-strapped consumers hunt online for the best deals – which include houses as well as cars – NCCC officials worry that they will fuel the growth of more unscrupulous traders.
NCCC also feels that lax enforcement by Putrajaya is allowing the legitimate e-merchants to get away with bad behaviour such as false advertising of products and late deliveries.
The most worrying part, said the Federation of Malaysian Consumers Associations (Fomca) secretary-general Datuk Paul Selvaraj, was that unlike regular traders who opened a physical shop or a company, crooked online traders were near impossible to catch.
“With technology moving this fast, it is almost impossible for us to keep up,” Selvaraj said, on the ability of consumer groups to help consumers deal with e-commerce cheats.
“The burden (when dealing with e-commerce) is shifted more to consumers to make the right choice and protect themselves,” he told The Malaysian Insider on the sidelines of the launch of NCCC’s complaints annual report in Kuala Lumpur on Tuesday.
Bogus e-commerce merchants are different from the typical Casanova scam or the prize-winning trap that Malaysians keep reading about in the media, where people are duped into giving up money with the promise of getting more.
In these cases, shady merchants actually put up advertisements of things for sale, usually at dirt-cheap prices.
NCCC legal executive Santhosh Kannan believes the popularity of e-commerce has shot up in the past two to three years in tandem with bargain websites such as Groupon, MyDeal and LivingSocial.
According to NCCC’s 2013 report, complaints on online merchants have jumped to 3,712 from 874 in 2012.
Also, e-commerce complaints outnumbered the complaints received about physical retailers, which stood at 2,051 last year.
“This shows that consumers prefer to purchase online despite knowing that they are vulnerable to scams and various problems related to online purchases,” the report said.
The NCCC is a non-profit group that helps consumers and traders handle disputes over goods and services.
NCCC legal executive Santhosh Kannan said although the body only started collecting complaints about e-commerce two years ago, grouses already outnumbered those on non-online retailers.
“With normal shops you can actually see what you are buying, but it’s different online,” Santhosh said adding that consumers were still prepared to risk their money because online goods are cheap.
Most of the complaints the NCCC received were on late delivery of goods ordered (47.2%), followed by product disputes (20%).
“Product disputes involve issues such as goods being different than what was advertised, lacking in features and product defects,” the report said.
About 15.6% of complaints were on scams where people lost money, 13.6% on bad customer service and 3.6% on over-pricing and fee disputes.
Although late delivery may on the surface appear a minor nuisance, it can be considered a breach of contract between trader and customer, said Santhosh.
“Customers order and would need to use a certain product by a certain date.
A retailer who is ordering from a wholesaler, for instance, would lose money if he is late in getting his goods to market.
” Despite the steady rise in e-commerce, he said, the Malaysian authorities have not been doing enough to ensure that businesses follow best practices and go after cheats.
“Now we even have people selling on Facebook which is very dangerous because they can just close down the site at any time and disappear with people’s money,” said Santhosh.
Selvaraj believes that because this form of commerce is becoming increasingly popular due to convenience and low prices, the government has no choice but to start taking them seriously.
As the cost of living goes up, consumers would be forced to look for ways to save money on everything, including shopping online where prices are lower.
“Merchants must be made to register their businesses with the Companies Commission of Malaysia and the government must take sterner action against those who refuse to register,” said Selvaraj.
There are a slew of measures under the Consumer Protection Act 1999 that the government can take to act against unscrupulous online merchants but the rub is in the enforcement, he said.
The authorities and the online business community should also develop a certification system to help guide consumers to trustworthy sites.
"There should also be more awareness campaigns on how to shop online safely and what to do when there is a dispute," said Selvaraj.
But at the end of the day, unlike regular shops, where there is a physical business that can be raided, the anonymity provided by the Internet makes it hard to catch bogus merchants.
“Right now, the best is for consumers to protect themselves,” he said.
– June 27, 2014.
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