KPDNHEP: Online fraud, identity theft cases on the rise

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Alexander Nanta Linggi

KUCHING (Feb 24): The Ministry of Domestic Trade and Consumers Affairs (KPDNHEP) said cases of identity theft, theft of credit card information and fraudulent offers and transactions are increasing at alarming rates.

“While e-commerce is delivering unprecedented product choice, convenience and price transparency, it also presents consumers with a number of new risks, such as identity theft and theft of credit card information. Fraudulent offers and transactions also are increasing at an alarming rate,” said its minister Dato Sri Alexander Nanta Linggi.

He said this in his text of speech delivered during the 2021 Malaysia Economic and Strategic Outlook Forum in Putrajaya recently.

Additionally, e-commerce platforms are also increasingly vulnerable to a growing illicit industry distributing harmful, unsafe, substandard or faulty products – including counterfeit and pirated products, he added.

As much as 50 per cent of drugs sold through online pharmacies are counterfeits containing the wrong ingredients; random mixtures of noxious chemicals; insufficient, too much or no active ingredients; or fake packaging.

In Malaysia, there has been a total of 2,997 cases of counterfeit products reported from 2017 to 2020.

Counterfeit items seized during operations included products such as food items, medicines, cosmetics electrical devices, clothing and luxury items, he added.

There has also been an increase of 112.5 per cent of online transactions complaints lodged at KPDNHEP in 2020, compared to 2019 (5,416 nos of complaints).

“The upwards trend can be contributed to the change of purchasing methods – from the traditional brick-and-mortar purchases to the online platform purchases. This shows that majority of consumers in Malaysia have already adapted to the new norm of Covid-19 through their daily online transactions.”

Nanta said these widespread online activities to target and deceive consumers present significant challenges for government and businesses to investigate and stop the flow of fake and unsafe goods.

“With the prevalence of the Covid-19 pandemic, many have opted for online shopping as their primary shopping method to satisfy their buying needs while attempting to keep safe from the virus.”

“As more and more online retailers emerge in this ever-growing and ever-advancing market, the number of online shoppers has increased as well.”

As a result, instances of online retailers taking advantage of their customers using unethical or even illegal advertising or marketing tactics to attract more customers has also increased as well, he said.

He said online retailers have many ways to increase their chances of profit-making by using pricing strategies such as ‘yo-yo pricing’ (which is increasing the price of their products when supply is low and then decreasing the price after the supply increases) and ‘predatory pricing’.

“Predatory pricing occurs when online businesses lower the price of their products below the manufacturing cost in hopes that it will drive their competitors out of business.”

“Another strategy that is often deployed is when unscrupulous retailers mislead customers or consumers through ‘fake’ or misleading discounts, which many consumers are unaware of,” he said.

“This was rumoured to have happened recently during the highly-anticipated yearly nationwide ‘11.11’, Black Friday, and ’12.12’ sales.”

Consumers however can protect themselves when faced with misleading advertisements or representations by online businesses by filing a complaint with the e-commerce platforms directly.

Many E-commerce platforms such as Shopee and Lazada have their own policies for dealing with misleading discounts, he said.

For example, Shopee prohibits price manipulation and fake discounts as they create a false impression of the product prices. Listings with misleading discounts will be suspended by Shopee for a first offence, with no penalty as a warning, he explained.

However, he said, if there is any subsequent offence by the seller in the future, all listings found with the behaviour of misleading discounts will be deleted as it would be a ‘Prohibited Listing’.

Similarly, sellers on Lazada are not allowed to offer misleading discounts during the campaign period such as 11.11, 12.12 among others, he added.

Lazada may remove the products from listing if the sellers are found to be in breach of the policy, said Nanta.

Aggrieved consumers can also choose to lodge their complaints – either to the KPDNHEP Consumer Complaints Management Centre (or the PPAP) or the National Consumer Complaints Centre (NCCC) or the Ministry itself.

PPAP is the official ministry’s complaints channel and can be reached via the hotline 1-800-886-800, the e-Aduan system, e-mails, WhatsApp application and walk-in complainants.