Consumer electronics are emerging as the favourite commodity for cheats and swindlers to peddle fake and stolen wares. (Photo: iStock)
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Sold a Lemon Online? For Fake iPhone Buyers, Law Comes to Rescue

With rogue sellers flooding the online marketplace with fake and even stolen goods, including high-end mobile phones, customers need to beware. Under current laws, buyers in India cannot retain any stolen goods and are required to report such products in their possession to the police. But they have remedies to claim a refund, replacement and damages.

What may cause concern to consumers in this fast-paced life is that they would be required to go through legal remedies to claim refunds or damages as despite the Indian e-commerce market expected to grow by 37% to touch $ 20 billion by the end of the fiscal (as per a report by Internet and Mobile Association of India), few steps have been taken to provide blanket protection or insurance to consumers to shield them from unscrupulous traders.

Unethical Practices

According to Forrester12 Research report, the e-tailing revolution in India is primarily riding on the back of firms dealing in consumer electronics, travel and online books. And consumer electronics are emerging as the favourite destination for cheats and thieves to peddle fake and stolen wares.

Two recent cases should be a wake-up call for consumers and government alike.

This past week, Delhi Police nabbed six persons for stealing 600 high-end mobile phones from a city-based logistic company’s premises in the cargo area of Delhi airport and selling them to unsuspecting customers through e-commerce retailer Flipkart.

Another area of major concern for the cyber police is the sale of fake products online.(Photo: iStock)
Another area of major concern for the cyber police is the sale of fake products online.(Photo: iStock)

Some of the stolen phones were subsequently recovered from people who had purchased them online. In response to police summons, Flipkart said: “Each and every one of our 40,000-plus sellers are mandated to adhere to stringent guidelines. Any exception or violation is taken very seriously. We enforce a strict policy of zero tolerance against unscrupulous sellers who sell products that are fake, stolen, or in violation of any laws of the land.”

Snapshot
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Protection From Cyber Cheats

  • Under current laws, buyers in India cannot retain any stolen goods and are supposed to approach police
  • Few steps have been taken to provide blanket protection to consumers to shield them from unscrupulous traders
  • Recent case of stolen mobile phones being sold on online portal should be a wake-up call
  • E-commerce sites cannot shrug their shoulders, as law puts the onus on them
  • Consumers can seek legal remedy in case of negligence by e-commerce companies

Keeping a Tab on Cyber Crime

But cyber law expert Pavan Duggal believes that the responsibility of the service providers does not end with such statements alone. Speaking to The Quint, he said: “Under the Information Technology Act 2000, the intermediary or the network service provider is liable in cases of sale of stolen or fake goods as they are mandated to exercise due diligence. Section 79 of the IT Act requires service providers to adopt reasonable security practices and procedures to prevent any wrongdoing. In the event of stolen goods being sold through online portals, the service provider would be liable to replace goods and would also be liable criminally for such offences if they take place due to their negligence.”

Another area of major concern for the cyber police is the sale of fake products online. With major players like Apple launching newer versions of mobile phones ahead of the festive season, the need for vigil has become even more pronounced.

Ahead of the launch of Apple iPhone 6s and 6s Plus in China late in September, the country was already flooded with their fakes. These were also being marketed openly by certain sites and with India being a major importer from China, it would not be surprising if many of these would have already found their way into the country.

Only a couple of months ago, there was a major haul of fake India-assembled Apple iPhone5 and iPhone6 smartphones in New Delhi.

The recoveries were made from a “trusted name” in mobile phones and accessories based at Lotus Plaza in Karol Bagh which also happened to be one of the biggest importers of mobile phones and accessories with offices in India, China and Africa. Apart from the counterfeit iPhones a large amount of assembling material for other smartphones was also recovered. The unit was marketing the fakes through Flipkart, Amazon and Shopclues.com, claimed the Delhi Police.

Addressing Consumer Grievance

In the event of such negligence by the e-commerce companies, Duggal said there is no exemption for them from liability and the consumers can sue them.

“Consumers have legal remedies at their disposal. They can claim a refund from the service provider for selling them fake or stolen goods. They can seek replacement of such goods with genuine ones. Consumers can also file for damages under the IT Act in special courts that operate in every state and in which adjudication officers have powers to pay fines of up to Rs 5 crore,” he said.

With festive season round the corner, the ball is now in government’s court to insure consumers against fraud. (Photo: iStock)
With festive season round the corner, the ball is now in government’s court to insure consumers against fraud. (Photo: iStock)

Unlike civil courts, consumers can expect speedy disposal of their cases in these courts which are required to conduct summary trials that are stipulated by Parliament to be completed within nine months.

On the issue of cyber insurance, Duggal said while some countries have an elaborate system in place which protects the consumers, in India the system is still in a stage of infancy and only a few insurance companies have ventured into it.

“The government, if it wants, can protect consumers under the IT Act by either legislating amendments in Parliament or by introducing rules under Section 79 of the Act,” he said. So at a time when another festive season is drawing near and online sales are about to witness another boom, the ball is now in government’s court to insure consumers against fraud.

(The writer is a Delhi-based freelance journalist)