Introduction
In recent years, Nepal has experienced a digital transformation. Smartphones are commonplace, internet connectivity has spread to remote parts, and social media is increasingly used for communication and commerce. This digital transformation has brought convenience and possibilities, but it has also expanded the space for new criminal activities such as online scams.
There are victims of online scams in Nepal from phony sellers on Facebook to fraudulent e-commerce websites. Victims of online scams in Nepal are on the rise, but the law is not keeping up with these crimes. There is a clear gap in the law that has created a virtual haven for scammers with almost no restraints on their behaviors, and little recourse for the affected victims.
This blog seeks to highlight the significant increase in online scams in Nepal, particularly through social media and e-commerce, examine the law which is dreadfully outdated, and provide suggestions for changes that would be required to support victimized consumers in the digital world.
- Rise of Social Media and Online Shopping in Nepal
Over the past few years, the digital landscape in Nepal has changed tremendously. Notable outcomes are:
- An explosion of social media commerce: Facebook and Instagram (and TikTok) have turned into commerceheavy platforms. There have been thousands of Nepali entrepreneurs who are running "Instagram shops" or "Facebook stores" to sell clothing, cosmetics, electronics, home goods and more.
- Increased trust in using digital payments: With a growing number of digital wallets like eSewa and Khalti and mobile banking apps, Nepalis are more inclined to make online payments which reduces a major barrier for ecommerce.
- More delivery services available than ever before: Delivery companies such as Pathao, Foodmandu and many independent delivery services have made it easier to receive products purchased online, especially in areas that traditionally lacked brickand-mortar retail.
- No official verification: Unlike packaged ecommerce solutions that require sellers to be verified, social media platforms offer virtually no seller verification. Anyone can create a business page and start selling without having to prove their legitimacy which has created a perfect storm for scammers.
With the COVID-19 pandemic being a facilitator, lock down measures pushed more and more Nepalis to turn online to satisfy their shopping habits. The speed at which Nepal's digital commerce market is expanding is not matched with regulatory scrutiny, which leaves it vulnerable to scammers.
2. Common Types of Scams
Social Media Scams
- Fake product pages with copied reviews: Scammers create convincing business pages on platforms like Facebook and Instagram, often copying images and positive reviews from legitimate businesses. They build trust by posting frequently and responding to inquiries, only to disappear after collecting payments.
- Advance payment frauds: A common tactic involves requiring full payment upfront for "limited stock" or "pre-order" items that never arrive. Once payment is sent, the seller becomes unreachable or blocks the buyer.
- Identity theft and phishing links: Some scammers send messages containing malicious links that appear to be payment confirmation pages but actually steal personal information or banking details.
- Fake giveaways and contests: Fraudulent pages run seemingly legitimate contests requiring participants to share personal information or make small "registration payments" to claim nonexistent prizes.
3. Online Shopping Scams
- Delivery of subpar or improper item: Some of the scammers will deliver something, but it might be counterfeit and damaged or totally different than what they advertised. By the time you are aware it is a scam, your seller has disappeared.
- Fake ecommerce platforms: Some sophisticated scammers build whole websites that mimic legitimate online stores with product listings and checkout systems. They take the payment and personal information and never fulfill the order.
- No refund or return policy: Many online sellers in Nepal provide no clear refund or return policy. When things go wrong, the customer has no recourse as there are no laws or regulations in Nepal regarding these transactions.
- Counterfeit goods: Luxury items, electronics, and cosmetics are almost always sold counterfeit as real items for slightly less than retail. It makes them look like good deals when some of these items are really bad, worthless knockoffs.
4. Why the Legal System Is Failing
Nepal's legal structure is completely inadequate for dealing with scams occurring online:
- Old cybercrime law: The Electronic Transaction Act of 2063 (2008), established before social media commerce existed in Nepal, contains laws against cybercrime, but does not have any law related to online shop fraud.
- Consumer Protection Act: The Consumer Protection Act of 2075 (2018), which replaced the Consumer Protection Act of 2054 (1997), had some improvements but doesn't sufficiently address consumer protections or dispute resolution for a digital transaction.
- Limited jurisdiction of Nepal Police's cyber bureau: This bureau is lacking technical capacities, is overwhelmed with complaints, and doesn't have any clear guidelines when investigating social media scams, especially if there are fake identities.
- Obtaining the identification of anonymous sellers is extremely difficult: The majority of scammers are using false names, temporary phone numbers, and unverifiable payment methods, making it impossible to track them using conventional means.
- Crossborder issues: In many cases, scammers are also located from outside Nepal, therefore jurisdictional conflicts further complicate enforcement.
- Standards of digital evidence: Courts in Nepal have different approaches to digital evidence, making it difficult to successfully prosecute identified online scammers
5. The Need for New Legislation
In order to combat these challenges, Nepal desperately needs comprehensive legal reforms:
- Drafting unique ecommerce and digital fraud laws: Nepal needs legislation that deals specifically with online transactions, and create language defining obligations for sellers and platforms and create a process for resolution of disputes.
- Mandatory registrations and verification for online sellers: Requiring registration for business sellers’ online increases accountability and creates a paper trail for law enforcement.
- Platform liability provisions: Laws should require social media platforms to verify business accounts and put into place basic protections for consumers engaging in commerce on their platforms.
- Mechanisms for realtime grievance redress: An independent digital consumer protection agency with power to freeze suspicious accounts, and show up to assist victims quickly, would improve outcomes.
- Exemplary penalties for online fraud: Improved and increased penalties specific to fraud and digital fraud would prevent, and show that Nepal responded to digital crime.
- Crossborder cooperation: Given the nature of online scams/tricks, Nepal needs to tighten cooperation with other countries to catch scammers from abroad.
- Digital literacy initiatives: A government sponsored consumer awareness program could improve consumer ability to detect and avoid online scams.
6. What Can Consumers Do Now?
While waiting for legal reforms, Nepali consumers can protect themselves by:
Verifying seller credibility:
- Check how long the seller's social media account has been active
- Look for authentic reviews from real profiles
- Search for the business name online to see if complaints exist
- Ask for the seller's physical address and business registration details
Using safer payment methods:
- Opt for cash on delivery whenever possible
- If paying online, use platforms with buyer protection features
- Never transfer money directly to personal accounts for large purchases
- Request invoices and keep records of all communications
Practicing digital hygiene:
- Avoid clicking on unknown links sent via messages
- Never share OTP (One-Time Password) codes with sellers
- Be wary of deals that seem too good to be true
- Use secure passwords and enable two-factor authentication on payment apps
Reporting incidents:
- File complaints with the Nepal Police Cyber Bureau ([email protected])
- Report fraudulent accounts to the platform (Facebook, Instagram, etc.)
- Contact the Nepal Telecommunication Authority for telecom-related fraud
- Share experiences to warn others about specific scammers
7. Conclusion
While the digital economy represents an extraordinary opportunity for Nepal, its potential will be curtailed if consumers cannot engage with it confidently online. The current lack of legislation has resulted in a situation wherein scammers can perpetrate their behavior virtually unstopped, financially harming consumers and diminishing the trust in legitimate online businesses.
Unless actions are taken now to update law and amendments to law, and enforcement mechanisms strengthened, scams will continue to develop, and potentially halt Nepal's digital opportunity. All stakeholders (government field offices, social media platforms, and the consumers themselves) have a role to play to remove scams from the online marketplace.
As the implementation of Nepal's Digital Nepal Framework commences, consumer protection will not be achieved without attention first being given to protecting consumer rights in the digital space. Without robust legislative frameworks, effective enforcement measures, and improved consumer digital literacy, Nepal cannot succeed in ensuring that the benefits of its digital transformation reach all citizens and do not become new vulnerabilities.
Commonly Asked Questions (FAQs)
1. What should I do right away if I’ve been scammed online in Nepal?
Take screenshots of your chats, payment transaction, and the seller profile. Report it to the Nepal Police Cyber Bureau ([email protected] / 01-4201145). Report the scammer account on the app and contact your payment provider to try to reverse your transaction.
2. Are there laws that protect online shoppers in Nepal?
There are no laws specifically for online scams in Nepal. The Consumer Protection Act 2075 and Electronic Transaction Act 2063 are useful but have limited coverage and did not cover social media fraud.
3. How can I verify if an online seller in Nepal is real?
Search for their PAN/VAT number, then a physical address in addition to that! Check their social media history (does it look legit?), and read real customer comments. For larger purchases, consider cash on delivery.
4. Can I get my money back if I sent it to a scammer via digital wallet?
Possible, but you have to act fast! Contact your wallet provider and request a transaction reversal with as much evidence as possible. Some digital wallet providers offer basic dispute services, but depending on the provider many have no requirements or standards.
5. Are online scams common in Nepal?
Online scams are emerging fast but are present mainly in urban areas. The lack of coverage within laws and rapidly changing digital use means that many users are being put at risk. Shamelessly, rural communities are also entering this digital landscape with increased smartphone use.
[This article is for informational purposes only and does not constitute legal advice. Consult with a qualified legal professional for guidance on specific situations.]
