Carousell and Facebook to verify 'risky' sellers, advertisers to curb scams under new codes of practice

SINGAPORE — From June 26, Carousell and Facebook will need to verify "risky" sellers and advertisers against government-issued records as the local authorities crack down on e-commerce scams.

Messaging platforms such as WhatsApp, Facebook, Instagram, Telegram and WeChat will also need to roll out reasonable verification measures to root out fake accounts run by scammers or bots for malicious activities by the end of 2024.

These obligations are set out in newly issued codes of practise aimed at disabling scammers, who have taken advantage of online anonymity on e-commerce and messaging platforms to carry out criminal activities.

Failure to comply is a criminal offence under the newly minted Online Criminal Harms Act (Ocha).

The Ministry of Home Affairs (MHA), which issued the codes on June 21, said the Government would continue to work with the industry to try to minimise the effect of criminal activities in the online space on Singapore users.

Under the Code of Practise for E-Commerce Services, Facebook and Carousell will need to verify the identities only of sellers considered "risky", for a start.

If the number of scams reported on Facebook Marketplace, in Facebook advertisements and on Carousell does not drop significantly, MHA will require the two companies to verify the identities of all sellers and advertisers by early 2025.

The code also requires e-commerce platforms to provide payment protection mechanisms that release payments only after goods or services are verified to have been delivered, but MHA has waived this requirement for now.

A second code — the Code of Practise for Online Communication Services — requires Facebook, WhatsApp, Instagram, Telegram and WeChat to proactively take action against suspected scams and malicious cyber activities by creating a fast-track channel to receive and act on reports from the authorities.

By the end of 2024, the platforms must also roll out reasonable verification measures to root out fake accounts run by scammers or bots for malicious activities. An annual report on these measures must be submitted to the authorities.

Tech providers which fail to comply with the codes of practise may be directed to take corrective action. Failure to comply with a rectification notice is a criminal offence that may result in fines of up to $1 million under Ocha, which came into effect on Feb 1, 2024.

More than 13,000 instances of online criminal content and online activities, including scams, have been disrupted by Ocha since the law came into force, said MHA in response to The Straits Times' queries.

With the Act, the Government can issue directions and orders that will limit the exposure of Singapore users to criminal activities on online platforms.

MHA said that since the law was operationalised, account restriction, access blocking and disabling directions have been issued to various online service providers and internet service providers.

The Ocha codes come as scam cases in Singapore hit a record high in 2023. That year, 46,563 cases were reported, up 46.8 per cent from the 31,728 cases in 2022. E-commerce scams were second on the list of scam concerns in 2023, as the number of cases more than doubled to 9,783 cases from around 4,700 in 2022.

Meta apps Facebook, WhatsApp and Instagram were among the top online platforms exploited by scammers. These platforms accounted for almost half of the scam cases in 2023, amounting to around $280 million in losses.

Carousell's chief of staff Tan Su Lin said the platform will go the extra mile to comply with the codes by requiring both buyers and sellers considered risky to verify their identities via Singpass.

Tan said scammers also often pose as buyers, luring users to complete their transactions outside of the Carousell app by scanning QR codes or clicking on links so that the scammers can steal their personal information and banking credentials.

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Suspicious sellers are typically those using new accounts with low profile ratings and a large volume of chats, and featuring multiple listings of popular items with prices too good to be true.

Since Carousell rolled out Singpass verification for property listings in July 2023, and for ticket and voucher listings in October 2023, the local authorities have seen a drop in the number of scam cases related to such listings.

Singapore will be the first market where verifications will be done for risky users and advertisers, said Facebook's vice-president of public policy for the Asia-Pacific region Simon Milner.

If effective here, similar measures will be rolled out in other markets, he said, declining to reveal how Facebook defines a risky account for fear that scammers would use the information to evade detection.

"Tackling scams is a highly adversarial space. We continue to explore methods to identify content and accounts that violate our policies as well as working with government, NGOs (non-governmental organisations) and law enforcement to understand new techniques that scammers deploy, so we can get ahead of them," said Milner.

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This article was first published in The Straits Times. Permission required for reproduction.