Ecommerce scam victims: Majority would never get their money back

In the history of Ponzi schemes, there is no example of equitable justice. There is only one outcome: the house of cards comes crashing down, the mastermind is hauled off to jail, and the victims are the ones hung out to dry.

Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors.

Amidst the flurry of frantic activities by the authorities, insiders have long ago resigned to the grim realisation that the victims can only be offered table scraps.

Take eorange as an example. As many as 5,573 complaints were filed against the ecommerce platform with the Directorate of National Consumer Rights Protection (DNCRP), but with no money in sight, only 33 complaints could be disposed of so far.

The amount of money over which the complaints were filed is not small by any means. DNCRP's log shows that 10 of the worst eorange victims who sought help are owed a total of Tk 48.36 crores.

They are all buyers, and only 10 of the several thousands who are looking to the directorate for answers.

Information provided by insiders at the commerce ministry reveals that the company has roughly Tk 44 crores stuck in payment gateways, meaning that is the maximum that can be returned and disbursed -- not even enough to pay the 10 buyers.

Since July 1 last year, the gateways have been keeping such payments in the escrow accounts as per a directive of Bangladesh Bank, and waiting for confirmation from the merchants about the delivery of the products, according to the ministry information.

Escrow is the use of a third party, which holds an asset or funds before they are transferred from one party to another. The third party holds the funds until both parties have fulfilled their contractual requirements.

With eorange owner Sonia Mehzabin and the chief operating officer Masukur Rahman in jail over a Tk 1,100-crore lawsuit, and emptied-out bank accounts, there is apparently no real way, at least for now, to dispose of all the complaints filed by the platform's customers and merchants.

According to the relevant law, when any consumer files a complaint with the directorate, it can take two steps -- it can either mediate an arbitration between the seller and the consumer for an amicable solution, or it can impose a fine of up to Tk 50,000 on the seller, of which the consumer receives a quarter.

Ecommerce consumers buying high-value products, including electronic items and vehicles, choose arbitration, since with fines they can only get a refund of Tk 12,500.

But with ecommerce firms running on empty, the rights protection body is now facing an impossible challenge of realising money that simply does not exist.

There are 6,241 complaints against Evaly pending with the directorate since 2019. Data shows until June 2021, the disposal rate was 76 percent. The directorate's disposal rate was a solid 100 percent throughout 2019 and 2020.

But then the stack came tumbling down and the disposals came to a stalemate. The ecommerce company allegedly has liabilities of at least a thousand crores, of which around Tk 408 crore is to merchants.

According to commerce ministry data, the company has only Tk 28 crore in the payment gateways.

The chairperson Shamima Nasrin and chief executive officer Mohammad Rassel were sent to jail for defrauding customers, and a government-appointed board, led by Justice AHM Shamsuddin Chowdhury Manik, is scratching its heads wondering how Evaly customers would be refunded.

In a comical Hail Mary, the board had broken into Evaly's locker on February 1 last year, only to find a measly Tk 2,500 in cash and some blank cheques.

Sirajganjshop has roughly Tk 3.5 lakh stuck in the payment gateways, but it allegedly owes its clients tens of crores of taka. With no money in sight, the directorate's rate of disposal of customer complaints regarding Sirajganjshop currently stands at 17.65 percent.

The rate of disposal of complaints against Dhamaka Shopping, another beleaguered ecommerce company, stands at 16.27 percent.

According to the sellers' organisation, this company owes Tk 200 crores to suppliers, while law enforcers said the company received Tk 800 crore from consumers but could deliver about 20 percent of the products. The owner is abroad, absconding.

In major trouble are also the defrauded customers of 24Tkt, an airline ticketing service. Ministry data shows it has only Tk 5 stuck in one payment gateway, and Dhaka Metropolitan Police's Criminal Investigation Department said the firm swindled as much as Tk 50 crore.

Two directors of the company are in prison, while the others are absconding.

Complaints concerning Alesha Mart saw a disposal rate of only 3.09 percent. "The firm has Tk 42 crores stuck in payment gateways. They have already paid Tk 4 crore, but will need to be managing Tk 230 crores more," said AHM Shafiquzzaman, chief of the Central Digital Commerce Cell under the commerce ministry.

Meanwhile, even though the disposal rate of complaints against Priyoshop.com stands at 72 percent, the company has only Tk 1.7 crores stuck in payment gateways. Last year, the Bangladesh Financial Intelligence Unit had sought its bank details.

Qcoom customers can rest assured, since as much as Tk 391 crore are with five payment gateways, including Foster Corporation. The customers of the platform and Alesha Mart have already started getting their money back in phases.

"The nine gateway organisations have been instructed to refund the funds to the customers," said Shafiquzzaman.

The nine gateways are Bkash Ltd, Nagad, SSL, Foster Corp Ltd, The City Bank Ltd, Dutch Bangla Bank Ltd, United Commercial Bank Ltd, Southeast Bank Ltd, and ShurjoMukhi.

That the abysmal disposal rates are caused by the fact that the rights body is literally stacked against Ponzi schemes can be proved by its success rates in solving complaints in other fields. When ecommerce complaints are excluded, the directorate has had a 92 percent success rate over the last decade.

"With the owners and management officials in jail, it is difficult to dispose of complaints. Those outside the jails are trying to manage the money somehow," Shafiquzzaman added.