Without a doubt, electronic commerce continues to thrive dramatically, with new online shops sprouting each month. Such drastic expansion is in line with the proliferation of smartphones, tablets and other smart devices and the continued growth of 3G mobile broadband services that make the internet accessible almost everywhere.
Besides the growth of traditional online shops via websites, many new online shops have flourished on social media channels such as Facebook, Instagram and even the Line chat platform. The drastic growth of this “social commerce” trend has been fuelled by the fast and dramatic expansion of the use of social media.
Unfortunately, following in its footsteps are the dark shadows of electronic scams and fraud.
Paiboon Amonpinyokeat, founder of the law firm P&P Co, said many frauds and crimes had occurred on social media, but the rate of arrests and resolved cases was low.
“More than 10,000 online scams and fraud are in police files awaiting further legal action, but generally fewer than 3% of cases are solved,” he said.
The key reason, he explained, is that it has been difficult for authorities to track down culprits and arrest them, as gathering electronic evidence is difficult. Since most fraud and scams now happen on social media, actual identity and personal information is often not disclosed or fake.
“On top of that, most social network service providers tend to keep their clients’ personal data confidential, so it’s almost impossible to track down the culprits,” said Mr Paiboon, who is an e-commerce legal expert.
Most Thai online shoppers pay for their transactions offline by transferring money to shops’ or vendors’ accounts and not through credit cards.
“That makes tracking even harder, as most culprits use fake names and addresses for their bank accounts. So they often get away with it,” he said.
The most frequent cases comprise shoppers lured to purchase products online at prices lower than market prices, but they are never delivered after payments are made or they are delivered but do not appear or function as claimed. Most products cannot be returned or refunded. This also includes services.
Other cases include fake emails, phishing scams and stealing of personal data and credit card information for committing fraud.
Law of the land
Laws governing e-commerce and electronic fraud and crime include the Electronic Transaction Act (ETA), the Civil and Commercial Code and specific laws.
The ETA is aimed at providing legal enforceability and certifying the admissibility of e-document and e-signature. It also lays down key principles for regulation of e-service and information security. The Act was amended to include electronic stamp duties, corporate seals and printouts of electronic data in the list of certified e-documents.
With the ETA, all online transactions have the same legal binding as general transactions and electronic signatures such as PINs, passwords, fingerprints and bioscripts are treated like signatures in general.
Under the Civil and Commercial Code, all e-transactions, contracts and agreements have the same legal binding as traditional ones. The penal code will come into use for any cases of online fraud, phishing and such.
According to Mr Paiboon, however, these laws have proved to be insufficient to guard against and deal with fraud mushrooming in line with fast-changing technology and consumer behaviour. Insufficient laws and enforcement have hindered the gathering of electronic evidence and arrests.
Improvement needed
Mr Paiboon said online scams and fraud jumped 30% last year from 2012, and quite a number involved social media. He reasoned that culprits realised the difficulty of getting their identity and private information, so they no longer feared arrest.
“This is the problem of the internet. It’s borderless, and many online shops are outside the country. Or even if they are local and we know their IP [internet protocol] address, it’s still difficult to trace their personal information, particularly those on social media. Normally, service providers don’t give away clients’ private information and, most importantly, we don’t have any particular laws to force them to do so,” he explained.
Mr Paiboon believes it is necessary to amend the Criminal Procedure Act, which allows authorities to investigate and gather crime evidence with the legal consent of business operators or service providers. However, the Act has not yet extended to cover the gathering and accumulating of information in digital and electronic formats.
“With the amendment of this Act to cover electronic evidence and digital data, business and service providers will be obliged to cooperate with police officers in investigation. And that will make tracking down culprits’ information possible. That will surely make cybercrime suppression effective,” Mr Paiboon said.
Other useful hands
To guard against rising crime, the Electronic Transactions Development Agency (ETDA) is setting up an online complaint centre, which will be launched in three months.
ETDA executive director Surangkana Wayuparb said the centre will focus mainly on scams and fraudulent cases occurring on e-commerce. Victims can call up the centre when they are mistreated and cheated by online vendors, and cases will be followed through.
The ETDA is a unit under the Information and Communication Technology Ministry set up to develop, promote and support electronic transactions or electronic transaction services.
The unit is also setting up Thailand Mall, a gateway gathering all trustworthy online vendors and shops that pass its examination.
“This will be an e-directory of selected e-commerce business operators who pass our examination on their identities, existence, transparency and private information confidentiality. With this gateway, shoppers can shop with confidence,” said Mrs Surangkana.
She said the unit will also grant a “trust mark” to honest e-commerce operators so that people can shop with peace of mind.
Mrs Surangkana said e-commerce will continue to thrive in line with the growth of internet users.
“There are 26 million internet users in the country, and the figure will jump up to 30 million in the near future, so we need to ensure the safety and security of e-transactions,” she said.
Note of caution
To avoid being a victim of online scams and crimes, it is necessary that consumers do not shop on any doubtful websites or with any untrustworthy vendors on social media.
In most cases, victims are often lured by much cheaper prices of products or services offered on fraudulent websites or by vendors. People should always be extra cautious when prices are much lower than market prices. They should always bear in mind that it is harder to track down culprits on social media, so they should be extra careful.
It is smart always to keep copies of transactions or agreements made online as evidence, either in digital format or printouts. This will greatly help when unexpected incidents happen.
“On top of that, it is always useful to be aware of the Consumer Protection Act (CPA) so that shoppers know how to protect themselves,” said Mr Paiboon, adding that victims should first notify related authorities and the Consumer Protection Board (CPB) when they realise they have become a victim of online fraud.
Benefit of credit cards
Even though more shoppers are using online payments through payment service providers or credit cards, many Thais still feel more confident about paying with money transfers.
However, Mr Paiboon suggested it is always safer to make a payment via a credit card. The main reason is the CPA protects credit cardholders. It says cardholders are not entitled to pay for any goods or services that are not ordered by them or come in defective or do not function or appear as claimed. Credit card issuers will be burdened with this issue instead.
However, cardholders should be well aware of the law and contact the CPB if they are not satisfied.
“That’s because card issuers would normally say buyers should settle the payments, as the transactions are made under their e-signature endorsement, so they [buyers] must be responsible for them. In such cases, buyers should contact and seek help from the CPB, as they are normally protected by this Act,” Mr Paiboon said.
