Online selling platforms also liable in scams, says DTI
MANILA, Philippines — Online selling platforms such as Shopee and Lazada would be held equally liable as the vendors they host who are found guilty of selling deceptive and defective products, a Department of Trade and Industry (DTI) official warned on Tuesday.
Speaking at the Laging Handa public briefing, Undersecretary Ruth Castelo of the DTI-Consumer Protection Group said the agency’s fair trade and enforcement bureau would penalize both platforms and sellers with fines of up to P300,000 once the deception is proven.
“If the retailer is using a platform, the retailer together with the platform will be penalized. The biggest penalty that we impose is P300,000 if it’s proven that there was really a violation. “So, it’s up to them to decide who will be the one to pay, but they really have to pay the penalty,” she pointed out.
Castelo said that at the height of the pandemic in 2020 and early 2021, most of the complaints received by the DTI involved defective products — or those that were broken or did not function.
From the latter part of 2021 to the current year, she said the number one complaint was about deceptive products.
She said among the complaints they received were from online purchasers of expensive mobile phones and other gadgets who instead received boxes containing wet wipes, rocks, or toilet paper.
“This means there is an element of deception in what the sellers are doing,” Castelo explained.
According to the DTI, consumer complaints received by their office last year more than doubled to 27,947 compared to prepandemic levels of about 10,000.
Of these, only 2,500 were resolved, 9,900 were endorsed to the appropriate agencies, while the rest were either withdrawn or issued certificates to file so a case could be brought to court.
Of the total complaints, 44 percent, or 12,200, involved online transactions, with those tagged as deceptive, unfair, or unconscionable sales acts reaching almost 2,200.
Only last week, Trade Secretary Alfredo Pascual ordered two major e-commerce platforms to respond to customers’ complaints regarding scammers and sellers of defective, fake, and pirated products.
Pascual also asked the online platforms to remove unregistered and unlicensed online merchants, reminding them to quickly address concerns of consumers with undelivered parcels and those who have fallen victim to deceptive sellers.
While the official did not identify them, Shopee and Lazada are the two biggest e-commerce platforms hosting both local and foreign sellers.
Pascual said “deceptive, unfair, and unconscionable” online sales and practices are prohibited under various laws, including Republic Act (RA) No. 7394 or the Consumer Act, RA 8293 or the Intellectual Property Code, and Joint Administrative Order No. 22-01, series of 2022, or the Guidelines for Online Business Reiterating the Laws and Regulations Applicable to Online Businesses and Consumers issued in June last year.
“We have so many pending cases that are being resolved by our adjudication and mediation officers. We have been reminding (online sellers) to comply with our laws… These have to be really followed by our major platforms and even individual merchants,” Castelo said.
She added that the DTI has been in touch with the online platforms over the years, and while “they do resolve other issues… there are more issues that aren’t.”
According to Castelo, the DTI is also developing a tougher policy wherein online merchants, including platforms, that are the subject of “too many” complaints will be prohibited from selling permanently.
Online lending probe
Meanwhile, Senate Majority Leader Joel Villanueva on Tuesday urged his colleagues to look into the proliferation of illegal online lending firms involved in predatory loan practices, such as publicly shaming cash-strapped clients who failed to pay their debts on time.
“Debtors deserve to be treated fairly and with dignity,” Villanueva said as he filed Senate Resolution No. 641.
“[M]easures have to be put in place and properly implemented to guarantee that consumers are only transacting with registered and authorized online lending companies to protect their interest and general welfare,” Villanueva said.
Consumers were also warned on Tuesday by Globe Telecom Inc. that cyberhackers were circumventing the text scam blocking systems through the use of over-the-top (OTT) media services as they forge on with phishing attacks.
The Ayala-led company, in a statement, said that hackers were turning to OTT platforms such as chat applications to avoid detection by the telco filters.
“These fraudsters use both overseas and local numbers and mostly appear as business accounts with attractive profile photos to dupe people,” Globe explained.
These cybercriminals make various fake offers with the goal of securing the trust of unsuspecting victims.
In doing so, the users might give out personal information such as contact number, address, and bank account details, and taking hold of such data enables hackers to illegally take over their personal accounts, including e-wallets.