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KEY TAKEAWAYS

  • The emergence of E-Commerce.
  • What contributes to E-Commerce Fraud.
  • Common E-Commerce Frauds.
  • Measure for preventing Fraud and means to overcome the same.
  • Legal remedies available under the law.

INTRODUCTION

With the advent of globalization, trade and commerce across the globe has changed immensely. It has led to a greater flow of information and technology. One such development that took place is the advent of E-Commerce. E-Commerce is basically buying and selling of goods through electronic mode. Thus,E-Commerce stands for electronic commerce. These days E-Commerce has made it feasible for us to get things done with one touch while we sit down in our comfort. All kinds of transactions or transfers be it money, data, or services are covered under E-Commerce. E-Commerce led to digitalization which in return has made transmission of information very easy, quick,and cost-effective by cutting down on all other intermediary costs and also maintaining authenticity. Though E-Commerce has its own benefits, it does have a list of drawbacks. E-consumers are these days more prone to scams, fraud, phishing, misleading information, etc, their safety and privacy have become the most important concern for the E-Commerce business owners. Though there was initially no law under which such issues would have been dealt with, but with the rapid boost of E-Commerce the age-old Consumer Protection Act of 1986 was amended and its scope was expanded, thereby including even E-Commerce transactions.

WHAT IS E-COMMERCE FRAUD

E-Commerce includes utilizing the internet or electronic mode for business transactions involving an exchange of value. Such transactions are done across the globe over the whole internet network. These business transactions include B2B(business to business), B2C(business to consumer), C2C(consumer to consumer), C2B(consumer to business).

E-Commerce fraud is where illegal or unauthorized transactions are made with fraudulent intentions to deceive the E-Commerce business owners or the consumers. It is also called payment fraud. The most common reasons for such frauds to be encountered are the loopholes on the web or internet, the easy mode of accessing any kind of information as hacking has taken a major role in cyber crimes, they perform all these tasks anonymously which act as a plus point to them.

MOST COMMON E-COMMERCE FRAUDS

We have come across regarding various types of E-Commerce frauds through newspapers, news channels, social media, and various other platforms including word of mouth and also sometimes through personal experiences.A few common E-Commerce frauds includeCREDIT CARD FRAUD, chargeback fraud, typosquatting, phishing, triangular/triangulation fraud, identity theft fraud, friendly fraud, merchant identity fraud, etc.

  1. CREDIT CARD FRAUD: The fraud is committed by buying the card information or data through dark webs and then products and services are purchased through the same as the owner of the card.
  2. TYPOSQUATTING: Under this the fraudsters deceptively create a similar domain name to that of an authentic online store, thereby creating an affiliate link through which though it redirects to the actual domain, but it generates commissions for the fraudsters.
  3. CHARGEBACK FRAUD: Chargeback is a refund in simple terms.In it, the fraudster purchase things from an online store, and after receiving the good or services, he/she applies for a refund claiming that such a purchase was not done by them.
  4. PHISHING: Nowadays we see that each website or app asks us to create an account by providing our details and also some personal information. Phishing is an act in which various emails are sent to the e-customers by fraudsters pretending to be a genuine website. Then, the confidential personal information of the victim is requested (eg. Credit Card details, etc.).
  5. TRIANGULAR / TRIANGULATION FRAUD: Triangular or triangulation fraud gets its name from the activities that are done under it, there are three levels to this fraud. The first involves creating a fake duplicate online store with fake discounts etc, whereby people fall into the trap and place orders. These orders are then placed on the actual website by the hacker or the fraudster who collects the credit card details of the victim. He then places additional orders with the ascertained customer details.

HOW TO PREVENT OR OVERCOME E-COMMERCE

The above area few kinds of E-Commerce frauds that we face today, we have to be due diligent while making any online transaction. If in case, you have been a victim of an E-Commerce fraud you mustinform the card issuer about the same to safeguard yourself from any further frauds. There are a few steps that we need to take so that the same does not happen again, every now & then we need to check our account transactions for any suspicious activity; and we need to avoid telephonic scams and ads.

LEGAL REMEDIES FOR E-COMMERCE FRAUD

As already spoken E-Commerce initially did not have jurisdiction to be tried in the courts but with the changes brought by the Consumer Protection Act, 2019,E-Commerce had attained its jurisdiction through this and people can file for redressals. With the growth of technology and various cyber crimes taking place the Information Technology Act of 2000 was enacted and various provisions that deal with legal remedies for E-Commerce fraud and others are given.

REMEDIES AND PUNISHMENTS UNDER THE LAW

  • SECTION 66C OF IT ACT, 2000: This section deals with the punishment for identity theft, the section provides that anyone who fraudulently utilizes the unique identification or any electronic signature or tries to personify any other person in any transaction, will be punished with imprisonment for a period extending to 3 years and with a fine of 1 lakh rupees.
  • SECTION 66D OF IT ACT,2000:This section deals with cheating by personation by using a computer. Anyone who does the same shall be punished with imprisonment for a period extending to 3 years and with a fine of 1 lakh rupees.
  • SECTION 468 OF IPC: This section deals with the forgery of electronic records or documents for the purpose of cheating. Anyone who commits such an offense is punished with imprisonment for a period extending to 7 years with a fine.

CONCLUSION

With the advent of technology and developments happening all around, commercial activities have increased and shifted to digitalization. But there have also been various drawbacks. Privacy and security are one of the most common concerns of consumers and theyhave been threatened by online fraudsters. Thankfully, the authorities are taking the E-Commerce fraud complaint seriously, so there is a redressal mechanism in place.


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