by LYDIA NATHAN / Pic by RAZAK GHAZALI
THE Domestic Trade and Consumer Affairs Ministry (KPDNHEP) has recorded an increase of 112.5% in complaints last year, compared to 5,416 complaints in 2019, vastly due to the shift from traditional brick-and-mortar purchases to online platforms.
Minister Datuk Seri Alexander Nanta Linggi (picture) said as online retailers are mushrooming, so have unethical or even illegal advertising and marketing tactics to attract more customers.
“There are many ways to increase profit-making, like ‘yo-yo pricing’ — which is increasing prices when there is low supply, but decreasing it when supply is plenty,” he said yesterday at 2021 Malaysia Economic and Strategic Outlook Forum entitled “The Post-Covid New Normal — Where Do We Go from Here”.
Nanta Linggi said the complaints also included predatory pricing, or lowering prices below manufacturing costs in an aim to drive competitors out of business.
“Another strategy often deployed is when retailers mislead consumers through fake discounts, which allegedly took place during the highly anticipated 11.11, Black Friday and 12.12 nationwide sales,” he said.
According to Nanta Linggi, even though e-commerce has proven to be convenient and the choice for most, it has also presented consumers with risks, including identity theft and credit card fraud.
“Fraudulent offers and transactions are also increasing at alarming rates. In addition, e-commerce platforms are increasingly vulnerable to a growing illicit industry distributing harmful, unsafe, substandard or faulty products, including counterfeit and pirated products.
“In Malaysia, there have been a total of 2,997 cases of counterfeit products reported from 2017 to 2020,” he said.
Nanta Linggi added that there are many ways for consumers to protect themselves when faced with misleading or wrongful representations by online retailers.
Among others, consumers can file a complaint with the e-commerce platforms directly, as most have policies to deal with this.
“For example, Shopee prohibits price manipulation and fake discounts as it creates a false impression of the product prices. Listings with misleading discounts will be suspended by Shopee for a first offence, with no penalty as a warning.
“Similarly, sellers on Lazada are not allowed to offer misleading discounts during campaign periods and risk having products removed if found to be in breach of policy,” he said.
Consumers can also submit complaints through other avenues like KPDNHEP’s Consumer Complaints Management Centre and the National Consumer Complaints Centre.
Despite all this, Nanta Linggi encouraged consumers to be wary and careful when making purchases online, while conducting research on pricing and quality themselves.
“Online shopping platforms should also consider improving their policies when it comes to allowing businesses using their platform to arbitrarily price their goods.
“These platforms should heighten their controls over businesses, so that when a problem such as fake or misleading discounts arise, these issues may be dealt with speedily to the consumers affected by such tactics,” he noted.