TransUnion, a credit reporting firm said, “fraudsters appear to be trying to capitalize on the increase
in online transactions.” PHOTO BY SORA SHIMAZAKI FROM PEXELS
THE surge in online transactions during the pandemic has led to a significant rise in consumer complaints and instances of digital fraud, data show.
For consumer complaints, “from 2019 up to now we have seen a rise of around 600 percent,” Trade Undersecretary for Consumer Protection Group Ruth Castelo said.
“We received 2,457 complaints in 2019 involving online transactions. In 2020, during the pandemic, we received … [a total of] 15,967. This year as of August 31, we received a total of 7,813 complaints already,” she noted.
Castelo said the nature of complaints varied, from missing senior citizen discounts, no return no exchange policies, non-delivery, preference changes, and credit transactions.
The top complaint received, she added, involve “deceptive, unfair practices. The second one is poor customer service or those that do not have after sales services. Third is the liability for products and service imperfection or those products that have defects.”
Credit reporting firm TransUnion, meanwhile, said “fraudsters appear to be trying to capitalize on the increase in online transactions.”
Citing results of its third quarter Consumer Pulse survey, it said that 48 percent of respondents claimed to have been targeted by a digital fraud attempt in the last three months.
“Among generations, millennials were the most targeted (52 percent), while Gen Z was the least at 43 percent.” It added.
“Phishing (44 percent) and third-party seller scams on legitimate online retail websites (43 percent) were the two most common tactics used for digital fraud schemes against those targeted with online fraud.”
Baby Boomers and Gen X respondents “reported being most likely to be targeted with phishing at 49 percent and 48 percent, respectively.”
The TransUnion survey involved 1,100 respondents and was conducted from August 10-17, 2021. Gen Z respondents were those born from 1995 to 2003 while millennials were those born from 1980–1994. The Gen X were born 1965–1979 and Baby Boomers those born from 1944–1964.
The Trade department, Castelo said, has implemented several initiatives to ensure consumer protection.
“The Consumer Act was enacted in 1992 and that time probably the internet was not expected to be as big as it is now,” she noted.
While “online shopping was not included in the Consumer Act … provisions apply to online shopping now because it does not provide any distinction whether it’s online or offline,” she added.
“For the purposes of consumer protection, we are governed by the Consumer Protection Act. We apply the provisions of the Consumer Act and the DTI has a no wrong door policy.”
The department is also pushing for enactment of the Internet Transaction Act by the end of this year.
Castelo said this would solve e-commerce and online retailing problems because it provided the necessary power and authority to regulators.
“It’s very important because we see a lot of platforms that violate the law. We see medicines being sold online without the license to operate, then we see counterfeit products proliferating online,” she said.
Under the proposed law, the Trade department will have the authority to take down websites or issue cease-and-desist orders.
In the meantime, both DTI and TransUnion cautioned customers to be discerning when buying products online.
Trade Secretary Ramon Lopez said consumers should not be enticed by too-good-to-be-true marketing.
“We invite people to shop in established platforms because at the end of the day they can help you trace the source of the products if you have complaints,” he said.
TransUnion Philippines President Pia Arellano, meanwhile, said consumers should steer clear of offers that sound too good to be true.
“Legitimate financial institutions can never provide miraculous results in the short-term,” she said.
“Other precautions include doing a regular review of your bank accounts for any suspicious activity, never providing sensitive information such as PINs (personal identification numbers) and one-time passwords, and keeping your information secure against phishing attacks.”
Trade Undersecretary for Consumer Protection Group Ruth Castelo said, “the top complaint involve deceptive, unfair practices. The second one is poor customer service or those that do not have after sales services. Third is the liability for products and service imperfection or those products that have defects.”