Nitesh Kadam – B.B.A LL.B
University of Mumbai Thane Sub-Campus
Abstract
The integration of technology has resulted in the rapid growth of e-commerce sector in India. Every seller is trying to expand its business across the country by selling goods and services online on e-commerce platforms and making it convenient to purchase goods and services online. However, this convenience comes with significant risks to buyers, particularly in the form of online shopping scams. This research paper explores what e-commerce scams are, the various types of scams, and the reasons for online scams in India. It also examines the challenges that the government faces while addressing e-commerce scams. Furthermore, this paper analyzes the current legal protections available against e-commerce scams in India, including various statutes, evaluating their effectiveness in addressing these deeply. Finally, it discusses the implementation that government, judiciary and consumer can do in online scams and how to avoid online shopping scams.
Keywords
E-commerce scams, Online shopping Scams, scams, E-commerce fraud, Consumer rights
Introduction
In today’s era everything has digitalis every business is moving towards e-commerce platform and makings available its goods and services to large number of buyer. E-commerce or electronic commerce business can be define as buying and selling of goods and services with the use of internet with help of smartphones, tablets, laptop, computer and other smart devices which are connected to internet. E-commerce platforms provide unmatched convenience by offering a wide range of products and services at competitive prices, delivered directly to consumers’ doorsteps of consumers and other businesses also. There six major models e-commerce businesses:
- Business-to-consumer (B2C)
- Business-to-business (B2B)
- Business-to-government (B2G)
- Consumer-to-consumer (C2C)
- Consumer-to-business (C2B)
- Consumer-to-government (C2G)
E-commerce industry is so huge in India as of 2025 it’s around $137.21 Billion and can be expected to grow around $363.30 Billion till 2030 which are huge numbers and regulating such growing industry is duties of government. As e-commerce sector will grow it can also help to grow GDP of country. Such rapid growth in this industry can also attract cyber criminals to do online scam with people. According to The Indian Cybercrime Coordination Centre (I4C) in first four month of 2024, there were 740,957 cybercrime complaints registered, averaging over 7,000 complaints per day. This thing leads to us at our topic e-commerce scams in India.
What is E-commerce scam?
An e-commerce scam refers to targeting consumer with fraudulent activities conducted on online platforms where goods and services are bought and sold. These scams typically involves selling fake or unauthorized replica products, misrepresenting the quality of product, non delivery scam, creating fake websites and many more. These scamming practices not only resulting financial harm to consumer but also can result leak of consumer details such as bank details, personal data, etc.
Regulating such huge industry’s scams or frauds is so important and sensitive things as it involves consumers bank and card details, personal data of consumer, privacy of consumer so regulating become need to todays world. Government is try to regulate this industry but they facing multiple issues because of lack of technological and insufficient fundings, etc.
Research methodology
This study employs a combination of primary and secondary research methodologies. Primary sources include statutes like the Consumer Protection Act, 2019, and the IT Act, 2000. Secondary sources comprise scholarly articles, case studies, and analysis of reported incidents to provide a comprehensive understanding of the subject.
Rivew of literature
E-commerce Fraud and Scams
Various studies have explored the types of scams prevalent in the e-commerce space, such as phishing, website spoofing, non-delivery scams, and identity theft. For instance, phishing involves creating counterfeit websites that mimic legitimate platforms to extract sensitive consumer data, such as credit card details and passwords. These scams exploit consumer trust and digital vulnerabilities, leading to significant financial and personal data losses.
Challenges in Digital Regulation
Scholars argue that rapid advancements in technology have outpaced the development of regulatory frameworks, leaving significant gaps in consumer protection. The lack of robust enforcement mechanisms and the limited scope of existing laws exacerbate the problem. For example, the Information Technology Act, 2000, is often criticized for its inability to address emerging fraud techniques such as AI-enabled scams.
The Consumer Protection Act, 2019
The Consumer Protection Act, 2019, introduced significant provisions to safeguard consumers from unfair trade practices, including fraudulent online transactions. However, literature points out that the effectiveness of these measures depends on their enforcement. For example, the Act’s provisions for liability in false advertising and spurious goods are robust but lack practical application due to procedural delays.
Types of E-commerce Scams
Scams in the e-commerce sector can be done in various forms, each with unique characteristics, methods, and with multiple buyers at same time. Let’s look into some of the most common types of e-commerce scams:
- Phishing Scams with Mask sites:
Phishing scam is one of the common scam that scammers use to target consumers. Phishing scam involves creating mask or replica site of some legitimate sites(i.e. Amazon and Flipkart) send URL of sites by sending message via E-mail, messenger, WhatsApp and other social media sites or messaging apps. By this scammer gets consumers login details, card details and personal details this detail can be used in some illegal criminal activities by scammers. selling that data to others criminals on dark web.
- Website spoofing:
website spoofing refers to creating website with intention to scam people by misrepresenting customer attracting them by selling products at cheap price compared to other sites. These involves creating sites which looks legit with proper domains, fake customer reviews by scammer, selling replica product or selling damaged products to customer with intention to scam them
- Identity Theft:
When an consumer shares his personal information such as name, address, contact details and bank details on illegitimate sites it involves risk of identity theft. Scammers can use personal information for purchasing sim cards and open account on the name of victim for illegal activities or implementing unauthorized charges on victims.
- Non-Delivery Scams:
Scammers take payment for product they never intend to deliver it. Scammers advertise their products at cheap prices but fail to fulfill orders after receiving payment. This scams typically scammer use less amount of products as consumer will think that why they should complaint for such small amount.
- Selling Stolen Products:
Selling Stolen Products are most often used practices on second hand goods selling platforms like OLX and eBay. Scammer usually deals without proper bill of the product. In case of smartphone, once consumer activate and puts him sim in that phone it comes on the radar of the police.
Why e-commers scams happens in India?
In todays time, every single person is exposed to the internet no matter whether it’s 5 years old small kid or 75 years old aged person. This widespread access to the internet has brought vast convenience and connectivity but also creates the ways significant risks online frauds. These scams happen due to several reasons:
- Rapid Digitalization:
After the COVID-19 pandemic most of the businesses and sellers shifted their business online shopping this boost up e-commerce platforms. It has also opened up numerous avenues for fraud, as many consumers may not be fully aware of online security practices.
- Lack of Digital Literacy
Most of the people are aware of internet but less number of peoples are able lack in identify legitimate websites and it makes scammer to target such consumer how are unaware of scams.
- Advance Fraud Techniques:
Those who are aware or digital literacy they also get scammed as scammers use advance and new technologies to fraud people. Last example of such scams is digital arrest scam is currently going on many people are aware of it but scammer portray themselves as they are actually police or officer of some state.
- Insufficient Legal framework:
India have frame work for protection for consumers from online shopping scam but its not sufficient for the in the todays era as cyber scams are advancing and criminals are creating new scams to fraud consumer. With cyber scams advancement legal framework for such scams is also need to be evolved.
Protections for E-commerce scam under different legislations.
In India, various legislations provide protections against e-commerce scams, addressing consumer rights, cybersecurity, and fraudulent practices. its so important to consumer know and aware that what remedies available to them in such kinds of scam.
1. Information Technology (2020) Act, 2000
The Information Technology (IT) Act is the primary legislation control and protect cybercrimes and e-commerce in India. IT Act mostly deals with online scams and criminal activates that done with help of computers and smart devices. IT Act try to safeguard individual and group of individual from any kind of internet scam and threats. Key provisions for protection consumer or individual from e-commerce scams:
- Section 43A : Compensation for failure to protect data
This section talks about if any private entity has sensitive personal data or information and failed to protect that data is liable for compensation to that person or consumer.
- Section 66C : Punishment for identity theft
If any person fraudulently or dishonestly use the electronic signature, password or any other unique identification of another person for any activity is liable with upto three years of imprisonment and also liable for fine upto rupees one lakh
- Section 66D : Punishment for cheating by personation by using computer resource
If anyone (include mask site) with communication device or compluter resource cheats by personation (pretended to be someone else) is punishable with imprisonment upto three years and shall be liable for fine upto one lakh
- Section 72: Penalty for Breach of confidentiality and privacy
If any person has secured access to any persons electronic records, Information, documents or other material disclosed or sells such information to any person shall be punishable with upto two years of imprisonment or upto rupees one lakh or with both.
Any person who is victim of online shopping scam can register his complaint online on cyber crime department website (https://cybercrime.gov.in/) or can contact cyber crime department helpline no. 1930.
2. Consumer Protection Act, 2019
The Consumer Protection Act (CPA), 2019 protects consumer rights and provides mechanisms for redressal in e-commerce transactions. Consumer Protection Acts protects consumer from unfair trade practices, restrictive trade practice, misleading advertisement, and any kinds frauds from e-commerce site.
- Section 89 : False or misleading advertisement
Any person who causes a false or misleading advertisement with intention to damage consumer is punishable with imprisonment for upto two years and with fine upto rupees ten lakh and if he is subsequent offence then imprisonment upto five years and fine upto rupees fifty lakh
- Section 91 : Manufacturing and selling or distributing or importing spurious goods
Any person sells or distributes or imports any fake and if such product –
- If cause any injury then he will be liable for imprisonment upto one year and fine upto rupees three lakh.
- If cause any grievous hurt then will be liable for imprisonment upto seven year and fine upto rupees five lakh.
- If resulted death of consumer then will be liable for imprisonment upto seven year and fine not be less then rupees ten lakh.
Any consumer who is victim of e-commerce scams can approach District Consumer redressal Commission for the relief
3. Consumer Protection (E-Commerce) Rules, 2020
The Consumer Protection (E-Commerce) Rules, 2020, aim to protect the interests of consumers engaging in digital transactions. Here are the key provisions outlined in these rules:
- Transparency Requirements
E-commerce entities must provide clear information of seller, return & refund policies, exchange policies, payment methods and grievance redressal mechanisms on their site.
- Liabilities of Marketplace E-commerce Entities
The descriptions of goods and services listed should be clear, accurate and include a contractual undertaking with sellers to guarantee the legitimacy of products sold.
- Prohibition on Unfair Trade Practices
Sellers are prohibited from adopting unfair trade practices, posting fake reviews or refusing to take back goods or withdraw services if they are deficient. Rules specify conditions under which a return of goods can be requested by consumers, ensuring a straightforward and consumer-friendly return process. They must also not manipulate the price of the goods or services offered to gain unreasonable profit.
- Grievance Redressal
E-commerce platforms are mandatory to establish a grievance redressal mechanism. They must appoint a grievance officer who shall redress consumer complaints within thirty days of receiving the complaint.
Consumer can register grievance on the site – https://consumerhelpline.gov.in/public/ or can register grievance on the help line number 1915.
4. THE BHARATIYA NYAYA SANHITA, 2023
Certain sections of The Bharatiya Nyaya Sanhita (BNS), 2023 are also applicable in cases of fraud related to e-commerce.
- Section 318 : Cheating
- Section 319: Cheating by personation
The consumer can also file First Information Report (FIR) in his nearest police station for the scam that happened with them
Suggestions :
- Government
- Strengthen Cybersecurity Laws: Bring amendments to existing laws, such as the Information Technology (IT) Act, 2000, to include more specific provisions targeting e-commerce fraud. As e-commerce industry will grow it will attract criminals, hackers and scammers to do fraud with consumer with the help of e-commerce.
- Promote Digital Literacy: Promoting online safety and fraud prevention education in school curriculums and public awareness programs. Mostly in the school as many of small children are exposed to internet but they are not aware of scams.
- Consumer Awareness Campaigns: Organize public awareness campaign programs to educate consumers about identifying and avoiding scams. Many people are well literate but not many are aware of digital scams and cyber crimes.
- Judiciary
- Fast-Track Courts for Cybercrimes: The establishment of dedicated fast-track courts for resolving cases related to e-commerce fraud and online scams with individual person or consumer. This will increase trust of people on the judiciary mechanism.
- Training for Legal Professionals: Giving training for judges, lawyers, and law enforcement agencies to deal with cyber and e-commerce-related cases effectively.
- Establishing cyber crime courts : Establishing specialized court like criminal court, family court or civil court same for the matters of cyber crimes. Where only cyber crimes related case, e-commerce scams and stealing of digital data.
- Consumers :
- Verify the Legitimacy of Websites : Always check the URL for authenticity; legitimate websites usually have “https://” and a secure lock symbol. Avoid clicking on links from unsolicited emails or messages. Instead, visit the official website directly.
- Research the Seller : Read reviews and ratings from other buyers before making a purchase. Look for verified sellers or platforms that ensure seller authenticity. Use other legit website verifying tools to check site is legit or not. Try to contact customer care for conformation
- Use cash on delivery : If you think site is not genuine then try to order product on cash on delivery.
- Educate yourself about common scams : It’s also part of consumer to be aware of what digital scams are going on in the society .
Conclusion
The internet has become the need and part modern life, seeing such rapid growth of the e-commerce sector. The e-commerce industry is expanding at an unprecedented rate, offering convenience and accessibility to consumers. Yet, without strong regulations and consumer care, this growth can lead to significant challenges, exposing individuals to scams and fraudulent activities. To safeguard the interests of consumers, it is most important to strike a balance between innovation and regulation, ensuring that technological advancements benefit society while minimizing risks. Recognizing the associated risks, the government and judiciary are actively working to mitigate cybercrimes and e-commerce fraud. However, as consumers, it is equally important for us to educate ourselves about online safety and fraud prevention.
References
Articles
- Cyber Law: Offences and Punishment in India, SysTools.
- Legal Framework for E-commerce in India: Shielding Indian Consumers from Cyber Commercial Malpractices, Lawyers Club India.
- Online Shopping Frauds and Consumer Protection, E-Justice India.
- Why Online Scams Are on the Rise in India, DW.
Statutes
- The Bharatiya Nyaya Sanhita, 2023.
- The Consumer Protection (E-Commerce) Rules, 2020.
- The Consumer Protection Act, 2019.
- The Information Technology Act, 2000.