In a disturbing revelation, eight e-commerce companies in Bangladesh have been found to have laundered approximately Tk 7 billion under the guise of online retail operations. This fraud has raised serious concerns, as the fraudulent activities of these companies are leaving consumers vulnerable and eroding trust in the digital marketplace.
According to a special report by the Bangladesh Police Special Branch, the companies involved have exploited the growing demand for online shopping, especially during festive seasons like Eid, Puja, and the New Year, to deceive customers and engage in money laundering activities. This trend is tarnishing the reputation of the e-commerce sector, which has seen a global rise in interest, but in Bangladesh, it has led to increasing frustration among consumers.
The Criminal Investigation Department (CID) of the police has uncovered evidence of money laundering by eight prominent e-commerce companies. These companies are:Anander Bazar: Tk 3 billion laundered, E-Orange: Tk 232 million laundered, Dhamaka: Tk 116 million laundered, Ring ID: Tk 374.9 million laundered, Twenty Four Ticket Limited: Tk 444 million laundered, SPC World: Tk 117 million laundered, Sirajganj Shop: Tk 499 million laundered, kashnil.com: Tk 300 million laundered.
These companies have used various methods to deceive customers, including offering products at low prices and engaging in fake promotions to lure in buyers. Once customers paid for their orders, many never received the items, while the money was funneled out of the country, contributing to the illegal transfer of funds overseas.
While Bangladesh has seen a rapid increase in Facebook and Instagram-based e-commerce businesses, with around 100 million Facebook users, the report highlights a concerning trend: out of approximately 350,000 e-commerce pages, only 1,496 are registered with the Digital Business Identification System (DBID), accounting for a mere 0.50 percent of the total. This lack of registration and oversight leaves consumers exposed to fraudulent operations and makes it difficult for authorities to track and regulate these businesses.
With e-commerce fraud becoming a significant problem, authorities are under pressure to tighten regulations and ensure greater transparency in the sector to protect consumers from unscrupulous actors. However, the growing number of unregistered e-commerce operations presents a significant challenge to these efforts.
Government Losing Huge Revenue as E-commerce Fraud Rages On: The government is facing significant revenue losses due to a sharp increase in unregistered e-commerce and F-commerce businesses across the country. Bangladesh Bank data reveals that in 2020, the legal transaction volume in the e-commerce sector was Tk 5,142 crore, a number that has quadrupled to Tk 21,112 crore in 2024. However, this massive surge in transactions is tied to only 0.50 percent of registered e-commerce companies, meaning the vast majority of the industry is operating without contributing any revenue to the state.
The Rise of Fraudulent E-Commerce Tactics: E-commerce businesses are increasingly resorting to fraudulent tactics to exploit customers and avoid government scrutiny. These companies often open fake pages on social media platforms like Facebook, create misleading reviews, and artificially inflate likes and comments. They also illegally use influencers’ photos and videos to promote products, luring in unsuspecting customers with promises of attractive discounts and deals.
Once customers show interest, these companies demand full payment in advance through mobile financial services like bKash, Nagad, Rocket, Ucash, or SureCash. Additionally, they charge delivery fees and sometimes an extra 10 to 20 percent as part of a cash-on-delivery scam. However, many customers find themselves receiving low-quality, damaged, or completely different products, leaving them frustrated and without recourse.
The Shadow Economy of Unregistered E-commerce: The issue is further exacerbated by a significant portion of F-Commerce traders who are operating without proper registration. These businesses often use illegal mobile financial services to process transactions, frequently funneling money through MFS agents’ accounts rather than their own, making it difficult to trace the flow of funds. Moreover, dishonest mobile service providers are allegedly supplying registered SIM cards to fraudsters at inflated prices, preventing authorities from tracking the perpetrators effectively.
Past instances like the Evaly and e-Orange scandals highlight the alarming scope of the problem, where companies collected huge sums in advance under the guise of offering cheap products but failed to deliver. This prompted Bangladesh Bank to issue a 2021 circular to hold payments in payment gateways until products were delivered. Unfortunately, most of the customers affected by this move have yet to see their money returned.
A Call for Action and Regulatory Oversight: The intelligence report stresses the urgency of implementing stronger regulations to curb the rise of fraudulent e-commerce activities. Recommendations include mandatory registration for all e-commerce and F-commerce businesses, as well as the establishment of escrow services to safeguard customer payments, similar to practices seen in more developed digital markets. Additionally, authorities are urged to take action against the illegal transfer of funds abroad via hundi and to establish a regulatory framework for working with social media giants like Meta Corporation through the BTRC.If these measures are swiftly implemented, it is believed that affected customers could recover their lost funds and the government could begin to regain control over the burgeoning e-commerce sector, ensuring that it contributes to the country’s economy in a lawful and sustainable manner.
