PETALING JAYA: Up to 32% of consumer complaints on e-commerce are linked to fake advertisements, told a National Consumer Complaints Center (NCCC) senior manager.

Saral James Maniam told theSun from 2022 to 2024, complaints about scams increased from 14% to 19%, while complaints about misleading information or fake advertisement went up from 9% to 32% in the e-commerce sector.

“Bukit Aman Commercial Crimes Investigation Department reported that e-commerce fraud cases increased by 37% from 23,608 to 32,366 in January to November last year, with the total losses rising by 46% to RM1.13 billion.”

She said fake advertisements are becoming prevalent on e-commerce platforms such as Shopee, Lazada and Tik Tok Shop because scammers are getting more creative, using all sorts of tricks.

“Individuals deceived by fraudulent advertisements often lose trust in both the platform and the associated brand, especially when scammers impersonate legitimate businesses or fail to deliver products as advertised.

“For businesses, the repercussions extend to loss of sales, contributing to reputational damage and loss of customer loyalty due to the proliferation of fake products. Sellers should focus on truthful product features and adhere to industry standards for transparency and ethical behavior.”

She said combating fake advertisements necessitates thorough screening of advertisers, and it is a challenge to continuously monitor advertisement content on e-commerce platforms.

“Consumer Protection Act 1999, the Consumer Protection (Electronic Trade Transactions) Regulations 2012, and the Communications and Multimedia Act 1998, are aimed at combating fake advertisements on e-commerce platforms.

“However, the dynamic nature of digital platforms, global jurisdictional complexities, hidden identities of scammers and inadequate resources for law enforcement agencies, make it difficult to solve the issue.”

Saral said despite the existing framework, the evolving landscape of e-commerce platforms needs a holistic approach involving legal, technological and educational efforts to effectively tackle fake advertisements.

“This involves more than just telling consumers to exercise caution before making purchases or when they are interested in such products or services.”

She said NCCC and the Federation of Malaysian Consumers Associations have to collaborate with the Domestic Trade and Cost of Living Ministry, the Malaysian Communications and Multimedia Commission and the Health Ministry to discuss guidelines specifically for online sellers.

“Different ministries have different areas of jurisdiction where the e-commerce industry may have lost its focus.

“However, the guidelines to combat fake advertisements on e-commerce platforms should ideally be comprehensive, covering a wider range of products and services beyond just one category, ensuring clarity and effectiveness in addressing all aspects of e-commerce and protecting consumers from falling for similar scams everyday.”

Saral said Malaysia should explore Australia’s Co-Regulatory Approach where they proposed a draft exposure bill to combat harmful online misinformation.

“The bill aims to shift from a voluntary to a mandatory co-regulatory model, similar to the European Union’s approach.

“Under this model, platforms remain responsible for content, but stricter penalties are imposed for spreading disinformation.

“This means major digital platforms like Facebook and Google must adhere to a government-backed industry code, developed in line with the Australian Communications and Media Authority.”

Saral added that the eradication of fake advertisements not only yields substantial economic benefits but also enhances societal cohesion and trust in the marketplace.

“According to The Department of Statistics Malaysia, the country’s e-commerce income grew by 5.4% year-on-year in the third quarter of last year to RM289.5 billion from RM274.6 billion in 2022.

“By curbing deceptive practices, consumers are empowered to trust the authenticity of online offerings, leading to increased confidence and a thriving economy.”

She said authentic advertising reduces information disparities between buyers and sellers, enabling informed decision-making and promoting resource efficiency as it fosters fair competition, stimulates economic growth and protects businesses from legal disputes arising from misleading advertisements, ensuring market stability.

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