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Legally Speaking by Jane Tan Chiu Yen
FROM July 1, 2013, all businesses and services conducted online will have to comply with the Consumer Protection (Electronic Trade Transactions) Regulations 2012 (2012 Regulations). The 2012 Regulations were issued under s.150 of the Consumer Protection Act 1999 (Consumer Protection Act). The Consumer Protection Act did not originally apply to electronic trade.
In 2007, the Consumer Protection Act was amended to include electronic trading. While this amendment provided protection to consumers who traded online, the 2012 Regulations goes one step further by imposing obligations on online business suppliers and online marketplace operators to take certain steps to protect the interests of consumers.
The 2012 Regulations apply to any person who operates a business through a website or an online marketplace for the purpose of supplying goods or services (Online Business Supplier) and any person who provides an online marketplace (Online Marketplace Operator). An ‘online marketplace’ refers to a website where goods or services are marketed by third parties for the purpose of trade.
ONLINE BUSINESS SUPPLIERS
Online Business Suppliers are required to:–
1. Disclose the following information on the website or online marketplace where the business is conducted:
Their names (either the name of the owner, business or company) The registration number of the business or company, if applicable The email address and telephone number, or address of the online business supplier A description of the main characteristics of the goods or services The full price of the goods or services, including transportation costs, taxes and any other costs The method of payment The terms and conditions of the sale The estimated time of delivery of the goods or services to the buyer
A failure to disclose the foregoing information is an offence. Additionally, any person who discloses or provides information that he knows or has reason to believe is false or misleading also commits an offence;
2. Provide appropriate means to enable the buyer to rectify any errors prior to the confirmation of the order made by the buyer; and
3. Acknowledge receipt of the order to the buyer without undue delay.
ONLINE MARKETPLACE OPERATORS
Online Marketplace Operators are required to take reasonable steps to keep and maintain a record of the names, telephone numbers and address of the person who supplies goods or services in the online marketplace for a period of two years.
OFFENCES and PENALTIES
Any Online Business Supplier or Online Marketplace Operator who fails to comply with the 2012 Regulations commits an offence. A Magistrates Court may try the offence and impose punishment for such offence.
Any person will, on conviction, be liable to a fine of up to RM50,000 or to imprisonment up to three years or both, and for a second or subsequent offence the person will be liable to a fine of up to RM100,000 or to imprisonment up to five years or both.
If the offence is committed by a company, it will, on conviction, be liable to a fine of up to RM100,000, and for a second or subsequent offence a fine of up to RM200,000.
An additional fine of up to RM1,000 will be imposed on any person or company for each day for which the offence continues after the conviction.
Aside from the criminal penalties above, an aggrieved consumer may also lodge a claim with the Tribunal for Consumer Complaints for civil remedies against errant online traders.
The 2012 Regulations create transparency by requiring Online Business Suppliers to disclose their key details and Online Marketplace Operators to keep a record of those details. This makes Online Business Suppliers readily and easily identifiable. In the event of loss or fraud suffered by a consumer, it will be easier to track down and lodge a complaint against the perpetrator.
The 2012 Regulations also give certainty as to the description of goods and services, pricing, terms and conditions, method of payment and time of delivery. This in turn will increase consumers’ confidence in online buying.
With the 2012 Regulations coming into operation on July 1, 2013, Online Business Suppliers and Online Marketplace Operators must now start to take steps to comply.
The 2012 Regulations should therefore improve consumer protection online as well as encourage the development of electronic trading in the country. With online shopping slowly taking over traditional shopping, the 2012 Regulations will likely be warmly welcomed by consumers.
This article was contributed by Jane Tan Chiu Yen of Christopher Lee & Co