Ponzi schemes brought them Tk 6,050cr in just 4 months

Twenty-five controversial e-commerce platforms in Bangladesh were deluged with orders worth a staggering Tk 6,050 crore in just four months last year under Ponzi-like schemes that lured unsuspecting customers on the back of hefty discounts.

It came after the central bank carried out a comprehensive assessment exposing the sheer scale of scams that rattled the booming digital commerce segment.

Usually, e-commerce and Facebook-based traders in Bangladesh see monthly transactions of Tk 500-550 crore. But it rose to Tk 6,050 crore for the 25 firms alone between March and June last year, according to the report of the Bangladesh Bank.

The BB has so far identified 25 e-commerce platforms that are involved with the scams, including Evaly, E-orange, Qcoom, Dhamaka, Aladinerprodip, Sirajganj Shop, Alesha Mart and Dalal Plus, which received the money from clients through payment gateways and banks.

The platforms ran the operations that can be likened to the Ponzi scheme, an investment fraud method that pays existing clients with funds collected from new ones.

The fraudulent practices prompted the central bank to instruct banks, mobile financial services (MFS), payment service providers and payment system operators on June 30 last year to clear the payments in favour of e-commerce shops after clients get the delivery of the products.

The move was aimed at preventing fraudulent e-commerce platforms from embezzling money.

The order caused the transactions level to plummet: the transactions at the 25 platforms dipped to Tk 506 crore between July 1 and October 14 last year.

Many affected customers have not received products despite making the payments in advance. This handed a blow to the e-commerce sector, which was growing at a breakneck speed before the anomalies came to the fore.

The e-commerce sites chiefly received money from customers through payment gateways such as Software Shop Ltd (SSL), Nagad, Foster Corporation, bKash and Shurjomukhi Ltd.

After the BB move, Tk 561 crore got stuck with the payment gateways.

Affected clients have got back around Tk 56 crore since January 24 in refunds after the commerce ministry and the central bank took an initiative to release funds from the payments gateways.

Between March and June last year, the e-commerce platforms received funds amounting to Tk 2,746 crore from clients through SSL.

Some Tk 89 crore was stuck with the company as of January 31. It refunded around Tk 15 crore from January 24 to March 15 to clients.

Yesterday, SSL didn't respond to The Daily Star's request for comments.

Between March and June, clients paid Tk 1,840 crore through Nagad. Currently, about Tk 20 crore is stuck with the MFS, data from the BB showed.

The e-commerce companies received Tk 829 crore through Foster Corporation during the four-month period. On January 31, some Tk 383 crore was stuck with the gateway. It transferred Tk 42 crore to clients as of March 15.

Another Tk 352 crore was received by the platforms through bKash, the largest MFS in Bangladesh. Of the sum, about Tk 5 crore is now currently stuck with the company.

A commerce ministry official says the refund process is complex as many individual clients have made the payments through bank accounts and MFS providers even for the products purchased in a single order.

The balance at an MFS account is capped at Tk 3 lakh, so a user can't surpass the limit while purchasing any item.

"So, we have to verify whether the clients have already received the products," the official said.

"The biggest-ever transactions involving frauds have eroded customers' confidence in the e-commerce sector," said AKM Fahim Mashroor, chief executive officer of Bdjobs.com and AjkerDeal.

The platforms might have delivered products against only a small number of orders, he said, adding that a majority of them have not been refunded.

"Had the Directorate of National Consumer Rights Protection taken strict measures on time, the scams could have been contained much earlier."

Mashroor thinks that there is little scope for the affected customers to get back funds since the platforms ran a business model that cater to existing clients by taking money from the new ones.