New codes of conduct require Carousell and Facebook to vet ‘risky’ sellers and advertisers to curb fraud

SINGAPORE – From June 26, Carousell and Facebook will have to vet “risky” sellers and advertisers against government-issued registers as local authorities crack down on e-commerce fraud.

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

These obligations are set out in newly released codes of conduct that aim to prevent fraudsters who exploit online anonymity on e-commerce and messaging platforms to conduct criminal activities.

Failure to comply is a criminal offense under the newly passed 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 minimize the impact of criminal activity in the online space on Singapore users.

Under the Code of Conduct for E-Commerce Services, Facebook and Carousell will initially have to verify the identity of only sellers deemed “risky.” If the number of fraud reports on Facebook Marketplace, Facebook Ads and Carousell does not decline significantly, the MHA will require both companies to verify the identity 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 verifying that the goods or services have been delivered, but the MHA has waived this requirement for now.

The second code – the Code of Conduct for Online Communication Services – requires Facebook, WhatsApp, Instagram, Telegram and WeChat to proactively take action against suspected fraud and malicious activities in cyberspace by establishing an expedited channel to receive and respond to reports from authorities.

By the end of 2024, platforms must also implement reasonable verification measures to root out fake accounts run by fraudsters or bots in connection with malicious activities. Authorities must report annually on these measures.

Technology providers who do not comply with codes of conduct may be asked to take corrective action. Failure to comply with a correction notice is an offense that could result in a fine of up to $1 million under the Ocha Act, which went into effect on February 1, 2024.

Since the law came into force, Ocha has disrupted more than 13,000 cases of online criminal content and activities, including fraud, the MHA said in response to queries from The Straits Times.

This bill allows the government to issue directions and orders that will reduce the exposure of Singapore users to criminal activities on online platforms.

The MHA said that since the law came into force, instructions have been issued to various ISPs and ISPs regarding account restrictions, blocking and disabling.

Ocha Codes come as the number of fraud cases in Singapore reached a record high in 2023. This year, 46,563 cases were reported, an increase of 46.8% from 31,728 cases in 2022. E-commerce fraud has found second on the list of fraud problems in 2023 as the number of cases more than doubled to 9,783 from around 4,700 in 2022.

Meta apps Facebook, WhatsApp and Instagram were among the most frequently used online platforms by fraudsters. These platforms accounted for almost half of fraud cases in 2023, resulting in approximately $280 million in losses.