Thursday, March 30, 2023

Online businesses in Malaysia may soon require special licenses to operate

NewsOnline businesses in Malaysia may soon require special licenses to operate

The government is looking into a comprehensive law to bring online businesses under stricter regulations after cyber fraud in the country is at an all-time high, says Deputy Domestic Trade and Consumer Affairs Minister Datuk Rosol Wahid.

The deputy minister said a special task force is given the task to conduct a review for a new licensing mechanism and that existing regulations be amended.

He also revealed that the ministry is mulling a special licence for online businesses to protect consumers from scams.

“Online business and digital transactions are becoming a trend. It is important to ensure digital transactions and online businesses on platforms such as marketplace, social media, websites and shopping apps are conducive and safe besides being user-friendly.”

“We also plan to amend existing regulations to allow for the new licensing mechanism,” he said, adding that the ministry would study models used by countries such as the United States, China, Singapore and Saudi Arabia in the monitoring of online businesses.

Meanwhile, he said the ministry is engaging stakeholders including online platform providers, consumer and seller associations, academicians and economists to ensure all aspect, including consumer and seller protection and enforcement, can be effectively carried out.

Rosol said there is a dire need for tougher enforcement and legislation as the ministry had recorded a significant increase in complaints of scams involving online transactions for three consecutive years.

Source: The Straits Times

“For the record, of the total 34,681 complaints in 2020, 11,511 were about online transactions. In 2021, of 27,469 reports received, 11,463 were related to online transactions.

“So far this year, 15,957 complaints have been received with 4,760 related to online transactions,” he said.

Meanwhile, Rosol said the enforcement personnel would continue to crack down on online scammers while awaiting the new legislation.

Under the current legislation, Section 2 of the Registration of Business Act 1956 requires each online business to be registered with the Companies Commission of Malaysia, with offenders to face two years in jail or a RM50,000 fine, or both.

It is also compulsory for online traders to display the individual/business or company name; business registration number; email, phone number or business address, main description of goods or services offered, full price including shipping fee, freight, tax and other costs; terms and conditions and estimated delivery time.

Those who fail to display these details face prosecution under the 2012 Consumer Protection Regulations (Electronic Trade Transaction). First-time offenders can face maximum fines of up to RM50,000 or imprisonment of not more than three years or both, with business entities facing double the maximum fine.

On the other hand, individuals committing the second offence or more can be fined a maximum of RM100,000 or jail of not more than five years or both, with a fine of RM200,000 for businesses.

Meanwhile, Rosol said the ministry will also conduct several programmes to educate consumers on ways to prevent themselves from falling into online scams.

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