Carousell, Facebook Marketplace must verify the identity of all sellers if they fail to stop fraud: MHA

On the other hand, the e-commerce code applies to online services that facilitate e-commerce business and “pose the highest risk of e-commerce fraud among other services in Singapore.”

Facebook Marketplace, Facebook Advertisements, Facebook Pages and Carousell will have to comply with the code by December 31. These platforms accounted for over 70% of e-commerce fraud in 2023.

The Code has the same requirements as the Online Communications Code, with two additional caveats.

Users who post advertisements or posts for the sale of goods and services, or if they intend to do so, must be verified against government-issued documentation.

Services must provide payment protection mechanisms that verify delivery of goods or services before releasing payments to sellers.

“These additional requirements are based on what MHA considers more important in protecting end-users in Singapore from e-commerce fraud,” the ministry said.

The MHA says the Online Communication Code along with the Code of Conduct for E-Commerce Services will come into force on June 26.

USER VERIFICATION REQUIREMENTS

Under the E-Commerce Code, the MHA will prioritize the implementation of user verification requirements, which it has assessed as “most critical to reducing fraud.”

First, it will allow Carousell and Facebook Marketplace to apply verification requirements only to “risky sellers” and then expand them to more users if the fraud situation does not improve.

“Risky sellers” are users identified by these platforms as potential sources of fraud.

The MHA said on Friday it will assess the effectiveness of Carousell’s measures to verify the identity of “risky sellers” between July 1 and December 31.

“If the number of e-commerce frauds reported on Carousell does not decline significantly, MHA will require Carousell to verify the identity of all sellers by April 1, 2025.” – stated.

The MHA added that a similar assessment will be carried out for Facebook Marketplace between June 1 and November 30

The MHA will require Facebook Marketplace to verify the identity of all sellers by March 1, 2025 if the number of e-commerce frauds reported on the platform “does not decline significantly.”

The MHA also said it would require Facebook to verify the identities of all advertisers by April 1, 2025, if the number of fraud reports stemming from Facebook ads “does not decline significantly.”

He added that between July 1 and December 31, the MHA “will assess the effectiveness of Facebook’s measures to verify the identity of risky advertisers.”

The MHA said it will not implement a user verification measure for Facebook Pages for now to allow Facebook to “prioritize the rollout of user verification across Marketplace and ads this year.”

In a statement to the media on Friday, Carousell said its users would be required to verify their identity with Singpass if its system “detects behavior similar to known fraud patterns or policy violations.” Singpass verification is currently only required for two categories – real estate and tickets and vouchers.

The marketplace will also introduce a security policy aimed at educating users on “risky behaviors” such as paying directly to a seller before receiving an item, said Tan Su Lin, Carousell’s chief of staff.