Shopee achieves high marks in E-Commerce safety, While Carousell and Facebook Marketplace struggle to meet standards

SINGAPORE: In a move to counter the alarming rise in e-commerce scams, the Inter-Ministry Committee on Scams (IMCS) released the 2024 E-commerce Marketplace Transaction Safety Ratings (TSR) on Wednesday (10 Apr).

Amidst growing concerns, the ratings spotlight the continuous efforts of platforms to enhance their anti-scam features, although notable platforms such as Carousell and Facebook Marketplace lag in the lower tier.

Singapore has witnessed a disturbing surge in e-commerce scams, with the numbers nearly doubling from 4,762 in 2022 to a staggering 9,783 in 2023.

A substantial number of these scams originated from Facebook, where incidents skyrocketed to 4,550 in 2023, up from 1,138 in 2022 — taking up 46.5% of the total reported e-commerce scam cases in 2023.

The TSR initiative, first introduced in May 2022, aims to arm consumers with crucial information about the anti-scam measures employed by major e-commerce platforms.

The ratings evaluate platforms based on several critical safety criteria, including user authentication, transaction security, loss remediation channels, and the effectiveness of anti-scam features.

This year’s assessment brought to light Shopee’s significant strides in enhancing user safety, earning it a commendable four-tick rating.

“Shopee has shown exemplary dedication to improving the safety and security of its transactions. The introduction of rigorous user verification processes has notably reduced the incidence of scams on their platform by 65%,” remarked the IMCS in their report.

Key to the evaluation process are measures deemed essential for combating e-commerce scams: stringent user authentication and the provision of secure payment options. The effectiveness of these features in mitigating scams has been substantiated by the observed decrease in fraudulent activities on platforms that have implemented them.

Shopee distinguishes itself by providing a secure online shopping environment through Shopee Guarantee, an escrow service that retains payments to sellers until buyers have confirmed receipt of their orders. This method ensures a managed payment and delivery process. Conversely, Facebook Marketplace and Carousell operate on a different model; they merely host listings and enable connections between sellers and buyers, without intervening in the transaction process itself.

In a novel approach to fostering closer collaboration between e-commerce platforms and law enforcement, the SPF and the IMCS have encouraged platforms to co-locate staff at the Anti-Scam Command (ASCom). “As of early 2024, we’re proud to announce that both Carousell and Shopee have joined this initiative, showcasing their commitment to combating scams together with us,” stated an SPF spokesperson.

Ms. Sun Xueling, Chairman of the IMCS, emphasized the collective responsibility in the fight against scams. “Partnership is key in our battle against e-commerce scams. We cannot win this fight alone and are grateful for the cooperation from our partners in the e-commerce industry,” she said. “We urge all platforms to adopt the necessary safety features, particularly user verification and secure payment options, to shield their users from these fraudulent schemes.”

The recent criticisms of Facebook by Minister of State for Home Affairs Sun Xueling at the Committee of Supply debate on 29 February for its reluctance to implement suggested anti-scam measures drew a sharp response from Meta, Facebook’s parent company.

“We are dismayed by the statements made during the MHA’s budget debate,” a Meta spokesman said. “However, we remain committed to constructive dialogue and are seriously considering the ministry’s recommendations.”

Meta also highlighted its proactive measures against scams, including the removal of 1.3 billion fake accounts in the last quarter of 2022 alone.

“Scams are a complex, industry-wide issue, and we acknowledge that no single solution or company can tackle them alone. Our dedication to fighting scams includes continuous product and tool enhancements, alongside our partnerships with government bodies for consumer education,” the spokesman added.