Sujata Sharma was thrilled a month ago when she happened upon the Instagram page of an online retailer. Nancy Fashion, a business located at Shivalaya Chowk in Pokhara, sold fashionable clothing for a lot less money than traditional retailers. Additionally, the 25,000-follower page claimed that the business offered low-cost nationwide delivery of its merchandise.For Sharma, who the Post is identifying with a pseudonym to protect her identity, it seemed like an offer too good to miss.
When Sharma contacted the account to place her order, she was asked to pay for the dress online in advance. The delivery would be completed within the next 7 to 12 days. When she didn’t get the dress in the promised duration, she thought of checking the page to inquire what had caused the delay. But there was no page, it was deactivated and the phone number was unreachable. Sharma was crestfallen. She never received the dress. In Nepal, shopping habits have changed significantly of late, with tens of thousands of people shopping online. The country’s transition from a cash-based economy to a burgeoning digital payment ecosystem has been a remarkable journey with a positive impact on financial inclusion and economic development.
The pandemic sped up the shift to online shopping. Nepal Rastra Bank, the country’s central bank, started to keep records of electronic payments from the fiscal year 2019-20.The Nepali banks and financial institutions recorded transactions amounting to Rs2.76 trillion in a month from mid-June to mid-July 2020. Nepal government imposed the first lockdown after the pandemic between 24 March 2020 and 21 July 2020.Now, the monthly electronic payment transactions stands at Rs4.33 trillion.
Industry insiders say continued growth of e-commerce sales will lead many physical stores to shut down in the near future due to high rental fees.The apparel, consumer electronics, cosmetics, home furnishings and food stores are expected to close their shutters in the highest numbers.This may be a positive development for a country aspiring for a digital and cashless transaction. But online fraud too is growing at an alarming rate, worrying tech-savvy customers who have been increasingly taking to online shopping, especially after the Covid-19 pandemic.
Many online shops that have popped up in Nepal promise a service they never intend to deliver. Shoppers like Sharma send money online but never hear from the supplier again.“For thousands of shoppers like me, there is no legal remedy. No one wants to go to the police to log complaints,” said Sharma. “There are no consumer courts either.”In the past, scam calls that claimed the person on the other end had received a huge sum from someone abroad or won a lottery were common.
Nowadays, it is online scams that are on the rise, police say.Sharma is one of the many people who have been scammed with smaller amounts of money from online shopping. The modus operandi of many of these scams is common. First, an online account is set up on social networking sites such as Instagram and Facebook. Then there come posts promoting products, which are priced inexpensively to tempt potential buyers. They don’t accept cash on delivery.
Customers reach out to buy a few items, and the payment is made. A few days later, when the goods are not delivered, the customer reaches out for an inquiry but there is no response. Then the user is either blocked or the account is deactivated.
Simran Sharma [name changed] is another Kathmandu resident who shared a similar experience.This time it was an electronic items store called Smart Gadget Store.“I had no reason to doubt the page,” Simran said. “They had good stuff, reasonable prices, and a contact number that provided me with the bank account asking me to make a full advance payment. That is how all online shopping stores work.”Another fashion store called Miss Bovary has also been frequently accused of scamming its customers.
The number for the page, which has nearly 50,000 followers, is unreachable when customers inquire about their unreceived goods. While not all stores fail to deliver the products, the few that do also deliver wrong items or lower-quality goods. Apart from clothes and gadgets, scammers are now also cheating youngsters migrating to Kathmandu for their studies when they search for rooms online. A college student, who wished not to be named, said he was looking for a room to rent online. He found a page offering affordable rooms.
There was a condition though: “You have to pay Rs1,000 in advance online before visiting the room for confirmation. You will be refunded if you don’t like the room.” “After the advance payment, the page and contact are deactivated,” the student said. Reddit pages and social media groups are flooded with people discussing their issues and requesting others to be aware of such shops. Consumer rights activists say that market malpractice and cheating have of late become rampant—prevailing everywhere from microfinance and cooperatives to online and offline shops.
They have been demanding that the government set up consumer courts. But apparently, the government has been disregarding Nepal’s top court ruling issued three years ago to establish consumer courts in all seven provinces. Consumer courts, which are special courts set up by Nepal’s judiciary, aim to settle consumers’ grievances and swiftly address their problems.These courts also ease the burden on the judiciary and ensure speedy justice.
Officials say once these courts are established, consumers do not need to hire a lawyer or a legal professional for a hearing unless they feel the need.Consumer rights activists say that the delay in forming consumer courts highlights how negligent the government is when it comes to consumer rights protection. As online shops and payment systems proliferate, so do fraud cases.
The Cyber Bureau of Nepal Police said it registered 4,646 cases of cyber crimes last fiscal year, including incidents like password hacking, use of fake identities on social media and other information technology-related frauds. According to the bureau, in the last year in the Gregorian calendar, under the financial crime related to information technology, there have been 460 cases of fraud by online stores, 35 cases of room renting and online job fraud, and 37 cases of fake social media accounts. “The tedious process and dealing with legal procedures discourage people from filing a police complaint, especially as it is for smaller amounts of money,” said Inspector Rajkumar Khadgi of the Cyber Bureau.
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