Amber Michael (right) and Tako Derrick Akebe (left) who were accused of
defrauding Mr Tuyen Huy Nguyen Sh4.1 million through the online sale of
donkey hides. A lot of fraud takes place online, as does trading in
harmful or illegal substances and trade in counterfeit goods. FILE PHOTO
| PAUL WAWERU | NMG 
Summary
- A few months ago, there was uproar about a company that purportedly sold houses at very competitive prices through social media, that is Facebook. This is just one case of the kind of fraud that goes on through online trading.
- One law that may be used, if the identity of the perpetrators in known, is the Penal Code, where the perpetrators would be charged under criminal law.
- Other laws such as torts and contracts may also be applicable depending on the situation.
Online businesses have become the norm
of commerce today whereby one sets up his business and trades largely
online, whether or not he has a physical presence.
Such
form of business is advantageous as it gives consumers a wide range of
services, for example, at the click of a button a consumer is able to
purchase goods from a foreign retailer.
For the
business person, online presence allows access to a large market and it
also minimises establishment costs. It is not a requirement to have a
physical presence when doing business.
A unique
feature of e-commerce is that customers can make direct orders for goods
or services. Customers can download some products like books and music
at the click of a button.
A wide range of services are offered directly via the Internet, for example online classes.
E-commerce
has accorded all players unique advantages. The fact that the Internet
is accessible 24 hours from any location means that time limits and
barriers to trade are minimised. Orders can still be made at otherwise
odd hours.
E-commerce has enabled suppliers advertise
their products through the use of websites and e-mails. The online
trader thus has unique advantages over his peers who trade from actual
physical premises
Despite the gains of online trading, the risks are
high. A lot of fraud takes place online, as does trading in harmful or
illegal substances and trade in counterfeit goods.
A
few months ago, there was uproar about a company that purportedly sold
houses at very competitive prices through social media, that is
Facebook.
Buyers were required to deposit a large
percentage of the purchase price, so as to “secure” the house and buyers
could only view the houses upon payment of such deposit.
The company in question took deposits running into hundreds of millions and hurriedly shut down.
This is just one case of the kind of fraud that goes on through online trading.
While there are some laws that would check in, should you be faced with such an incident, a lot more needs to be done in terms of regulatory framework.
While there are some laws that would check in, should you be faced with such an incident, a lot more needs to be done in terms of regulatory framework.
However it is also appreciated that the
regulators cannot totally curtail harmful online trading such as fraud
perpetrated by people outside the country.
One law that
may be used, if the identity of the perpetrators in known, is the Penal
Code, where the perpetrators would be charged under criminal law.
Other laws such as torts and contracts may also be applicable depending on the situation.
Kenya
has seen an increased number of ICT law suits where just recently an
online trading forum was able to successfully stop a competitor from
riding on its goodwill.
As a consumer, the best way to
guard against falling into such situations is by undertaking thorough
due diligence before trading for many times, the identity of these
fraudsters is not known.
CATHY MPUTHIA is the founder of CMputhia Advocates.
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