Online businesses have become the norm of commerce today whereby one sets up his business and trades largely online, whether or not he has a physical presence.
Such form of business is advantageous as it gives consumers a wide range of services, for example, at the click of a button a consumer is able to purchase goods from a foreign retailer.
For the business person, online presence allows access to a large market and it also minimises establishment costs. It is not a requirement to have a physical presence when doing business.
A unique feature of e-commerce is that customers can make direct orders for goods or services. Customers can download some products like books and music at the click of a button.
A wide range of services are offered directly via the Internet, for example online classes.
E-commerce has accorded all players unique advantages. The fact that the Internet is accessible 24 hours from any location means that time limits and barriers to trade are minimised. Orders can still be made at otherwise odd hours.
E-commerce has enabled suppliers advertise their products through the use of websites and e-mails. The online trader thus has unique advantages over his peers who trade from actual physical premises.
Despite the gains of online trading, the risks are high. A lot of fraud takes place online, as does trading in harmful or illegal substances and trade in counterfeit goods.
A few months ago, there was uproar about a company that purportedly sold houses at very competitive prices through social media, that is Facebook.
Buyers were required to deposit a large percentage of the purchase price, so as to “secure” the house and buyers could only view the houses upon payment of such deposit.
The company in question took deposits running into hundreds of millions and hurriedly shut down.
This is just one case of the kind of fraud that goes on through online trading.
While there are some laws that would check in, should you be faced with such an incident, a lot more needs to be done in terms of regulatory framework.
However it is also appreciated that the regulators cannot totally curtail harmful online trading such as fraud perpetrated by people outside the country.
One law that may be used, if the identity of the perpetrators in known, is the Penal Code, where the perpetrators would be charged under criminal law.
Other laws such as torts and contracts may also be applicable depending on the situation.
Kenya has seen an increased number of ICT law suits where just recently an online trading forum was able to successfully stop a competitor from riding on its goodwill.
As a consumer, the best way to guard against falling into such situations is by undertaking thorough due diligence before trading for many times, the identity of these fraudsters is not known.
CATHY MPUTHIA is the founder of CMputhia Advocates.