Cheating Through E-Commerce Platforms
Overview:
Cheating on e-commerce platforms involves deceitful practices such as selling counterfeit products, non-delivery of goods after payment, false advertisements, manipulating reviews, fake seller accounts, and unauthorized transactions. The offences are mainly dealt with under the Indian Penal Code (IPC), Information Technology Act, and Consumer Protection Act.
Legal Provisions Commonly Invoked:
IPC Sections:
Section 420 – Cheating and dishonestly inducing delivery of property
Section 406 – Criminal breach of trust
Section 34 – Common intention
Information Technology Act, 2000:
Section 66C – Identity theft
Section 66D – Cheating by impersonation
Consumer Protection Act, 2019 – Deficiency in service and unfair trade practices
The Indian Contract Act, 1872 – Breach of contract
Case 1: Flipkart Non-Delivery of Goods Scam
Facts:
Customer ordered electronic gadgets on Flipkart.
Payment was made successfully, but the goods were either not delivered or replaced with inferior/used products.
Customer approached the police for criminal complaint alleging cheating.
Legal Issues:
Whether the platform is liable for third-party sellers’ acts?
Applicability of IPC Section 420 against the seller and Flipkart.
Outcome:
The courts held that if Flipkart acts as an intermediary platform, it must have reasonable mechanisms to ensure seller credibility.
The seller was booked under IPC Section 420 for cheating.
Flipkart was directed to improve its grievance redressal mechanism under Consumer Protection Act.
Reference: Various State Police FIRs, consumer disputes commissions rulings (e.g., Delhi Consumer Commission rulings against e-commerce giants).
Case 2: Snapdeal Fake Product Case
Facts:
Buyer purchased branded shoes through Snapdeal.
Received counterfeit product, despite advertisement of genuine goods.
Buyer filed complaint alleging cheating and unfair trade practice.
Legal Proceedings:
Snapdeal claimed it was just a platform, not responsible for seller’s actions.
Consumer forum ruled that the platform is jointly responsible for consumer protection.
The seller and Snapdeal were held liable for cheating under IPC Section 420 and Consumer Protection Act violations.
Significance:
Reinforced the principle that e-commerce platforms must monitor sellers to prevent fraud.
Platforms should implement KYC and verification for sellers.
Case 3: Amazon Fraudulent Seller Case
Facts:
Several customers were duped by fraudulent sellers on Amazon India.
Sellers collected advance payments but never shipped products.
Customers approached Amazon and police.
Legal Action:
Police registered FIR against unknown sellers for cheating.
Amazon was asked to cooperate in identifying fraudsters.
Courts held that if Amazon failed to act on complaints promptly, it could be held liable under Section 75 of the Consumer Protection Act (product liability).
Case 4: Fake Refund Scam Using E-commerce Portal
Facts:
Fraudsters created fake accounts on an e-commerce site.
They raised refund requests for products never purchased.
Payment gateway issued refunds, causing losses to the platform.
Legal Proceedings:
Investigation under IT Act Sections 66D (cheating by impersonation) and 66C (identity theft).
Arrests were made based on digital forensics.
Case highlighted importance of secure authentication mechanisms.
Case 5: Paytm Mall Cheating Case
Facts:
Customers booked electronic items on Paytm Mall during festival sales.
Many reported non-delivery or receiving damaged goods.
Despite repeated complaints, no satisfactory response was provided.
Legal Action:
Consumer court took suo-motu cognizance.
Paytm Mall was held responsible for deficiency in service and ordered compensation.
Case cited under Consumer Protection Act and IPC Section 420 for cheating.
Case 6: Fake Reviews and Ratings Scam
Facts:
Sellers on e-commerce platforms paid third parties to post fake positive reviews.
This misled customers into buying low-quality products.
Legal Issues:
Violation of Consumer Protection Act’s unfair trade practices clause.
Possible violation of Section 66D IT Act (cheating by personation).
Cases registered and fines imposed on platforms failing to regulate such practices.
Key Takeaways and Legal Principles:
| Aspect | Explanation |
|---|---|
| Liability of Platform | Platforms cannot completely disclaim responsibility. Under the Consumer Protection Act and judicial rulings, they are joint tortfeasors. |
| Seller Verification | Platforms must implement KYC, seller verification, and continuous monitoring to prevent fraudulent sellers. |
| Consumer Rights | Buyers have recourse to police complaint (IPC), consumer forum, and civil suits for refund and compensation. |
| Digital Evidence | Digital records, transaction logs, and communication are critical for investigation under IT Act. |
| Role of Intermediary | Platforms are intermediaries under IT Act, but “due diligence” is mandatory to avoid liability. |
Summary
Cheating through e-commerce platforms is a multifaceted problem involving fake sellers, counterfeit goods, non-delivery, fake refunds, and fraudulent reviews. The Indian legal system uses a combination of criminal law (IPC), IT Act, and Consumer Protection Act to tackle these issues. Case laws have increasingly held platforms responsible for buyer protection, emphasizing the need for robust monitoring and grievance redressal systems.
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