ecommerce

The Consumer Protection (Electronic Trade Transactions) Regulations 2012, an extension to the Consumer Protection Act 1999, comes into operation today. With e-commerce gaining greater traction in the country and online marketplaces such as eBay Malaysia, Lelong.my, Rakuten Malaysia, as well as our very own Garage Sales subforum – not to mention the many other blogshops operating in the country – becoming a more relevant alternative choice for shopping, the amended regulations provide an extra layer of protection for consumers who are still sceptical with online shopping.

It is not surprising, either: online shopping continues to record a significant amount of fraud cases on the various online marketplaces, prompting calls for more stringent regulations to be imposed on online businesses. The introduction of the new regulations is a significant step towards increasing transparency between buyer and seller in the virtual space.

But just how exactly does the new regulations affect both the consumer and the trader?

Article continues after the jump.

The Bare Essentials 

Despite the fact that the amendments were made last year, the Consumer Protection (Electronic Trade Transactions) Regulations 2012 has remained largely under the radar for most consumers and traders - and despite the implications it has for both sides.

Essentially, the new regulations requires online business owners to disclose a significant amount of information on their website or trade space in the marketplace, both regarding their business – such as contact details – as well as details of the goods or services that they offer. Business owners are required to disclose their names (or the name of their business or company), email address and telephone number, company registration number (if applicable), full price of goods sold, methods of payment, as well as any terms or conditions that they may have.

E-Commerce-Solution(image credit: spinfocom.co.in)

Also, the business owner is required to enable a buyer to amend any errors regarding any order made by the buyer before confirmation of the order. On top of that, the business owner must also immediately acknowledge receipt of the order to the buyer.

The business owner is deemed to have committed an offence according the the new regulations if he or she fails to disclose any one of the information that is required, or discloses false information.

Online Marketplaces Now Have Greater Responsibility, Too

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The new regulations also impart greater responsibility on the online marketplaces as well. With the new regulations in place, an online marketplace operator (where an online marketplace is defined under the regulations as “a website where goods or services are marketed by third parties for the purpose of trade”) must keep and maintain a “record of the names, telephone numbers and the address of the person who supplies goods or services in the online marketplace, for a period of two years”.

Clearing Misconceptions

One of the biggest misconceptions regarding the new regulations is that anyone who conducts a business online must register their businesses with the Companies Commission of Malaysia (CCM). According to the new regulations, a business owner must disclose, among others written earlier, “the registration number of the business or company, if applicable”.

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Hence, while the Consumer Protection (Electronic Trade Transactions) Regulations 2012 does not explicitly require businesses to be registered as a company with the CCM, these requirements may already be covered in other Acts, such as the Registration of Businesses Act 1956 or the Companies Act 1965. Online businesses, after all, function the same way as other physical businesses and are bound by the same set of laws.

What about the individual seller who is looking to offload their used goods online then? Many sellers on eBay and even our Garage Sales usually sell their wares on a one-off basis, as and when required. Interestingly, these individuals are not explicitly addressed on the regulations. On the other hand, the act of buying and selling constitutes as a business transaction, thus making these individuals liable under the new regulations.

A Significant Step for the Growth of e-Commerce

The amended regulations of the Consumer Protection Act 1999 can be seen as a very positive step by the Government in its bid to encourage greater consumer participation in local e-commerce, as it ensures all parties involved – in particular, the sellers – provide enough information to ensure greater transparency in transactions to inspire greater confidence among consumers.

However, the greater responsibility lies still with the consumer. At the end of the day, the laws may be there to protect the consumer, but common sense must prevail above all. Research of a seller’s reputation prior to striking a deal is always recommended, and of course, if a deal sounds too good to be true, it probably is.

Further reading:

Consumer Protection (Electronic Trade Transactions) Regulations 2012

Consumer Protection Act 1999

Companies Commission of Malaysia (Acts and Regulations)