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E-commerce :

legal tips on product-related deception

With the rise of e-commerce and the ability of consumers to shop online, have come increased incidences of hacking, fraud and deception. Product-related deception is a crime which leaves internet users looking for legal answers as to what action to take. Here are some tips.

E-commerce: legal tips on product-related deception © PictureP.-Fotolia
E-commerce: legal tips on product-related deception © PictureP.-Fotolia

The term product deception or more pertinently, product-related deception, describes a situation where a person sets up a fraudulent website or profile to sell products. Once an order is placed, the seller either fails to deliver a product or delivers a defective product. The aim such online sales fraud is to bring consumers to pay for items without receiving any services or goods in return.

The crime can affect people in different ways: where hackers have stolen an internet user’s identity, that person can find themselves falsely accused of product-related deception; or an internet user may have placed an order, only to find that the goods they have ordered are never delivered.

This article provides an overview of legal questions concerning product-related deception in the e-commerce sphere.

Product-related deception is something which occurs frequently in relation to online transactions. Online auctions, such as eBay, are ideal for setting up fraudulent sales profiles.

Criminal liability

Paragraph 263(1) of the German Criminal Code (Strafgesetzbuch, StGB) foresees punishment by fine or a jail sentence for up to 5 years for anyone who commits fraud. This paragraph also applies to online product-related deception.

The precise punishment a perpetrator of product-related deception would face turns on the particular facts of each case. Judges will often consider aggravating and mitigating factors and adjust the level of punishment accordingly.

Product-related deception on a commercial scale, for example, is an aggravating factor which sees the punishment increase to up to 10 years imprisonment.

An early admission of guilt or an offer by the perpetrator to make reparations, on the other hand, are mitigating factors which lead to the punishment being reduced.

Civil liability

In addition to criminal liability, a perpetrator of product-related deception could also be held liable in civil law. Under § 823 of the German Civil Code (Bürgerliches Gesetzbuch, BGB), taken together with § 263(1) StGB, the perpetrator would be liable in tort and obliged to compensate the victim for any loss.

If you have been accused of product-related deception, you will most likely be invited to a police interview.

Regardless of whether you actually committed the crime, or have been falsely accused, it is advisable to seek legal advice before attending the interview. If you attend the interview alone, you may well be unprepared and unaware of your rights. Also, a lawyer will able to view the police record and can provide tailored advice on how to react.

It should be noted that you are generally not obliged to attend a police interview and that if you do attend you have the right to remain silent. Remaining silent in a police interview or refusing to attend does not amount to a confession and has no negative consequences. Only when you receive an invitation from the state prosecutors are you obliged to attend, however you do have a continued right to remain silent.

a) Sold but lost goods

It may be the case that as an online seller, you properly packaged and sent the goods but they were lost during transport.

In distance contracts between private individuals, it is indeed the purchaser who carries the risk of products being lost during carriage (§ 447(1) BGB). This means that if goods are lost, the seller is not liable.

However, the seller must prove that the products were definitely sent. If a seller is unable to prove that the goods were sent, the suspicion of product-related deception is more readily justifiable. To make it easier to prove the goods were shipped, it is advisable to insure their carriage.

If it is too late and you have already been accused of product-related deception, it is advisable to take legal advice in order to properly assess the evidential situation with a view to attempting to settle the case out-of-court.

b) Stolen identity

With the rise of social networks, it has become easier for fraudsters to obtain sensitive personal information of third parties.

It may be the case that someone has fraudulently set up a seller profile using your identity, and has entered into sales contracts for products which do not exist.

In such situations it is also important to obtain legal advice. A lawyer can gain access to the charges against you and can establish the extent to which your identity has been misused. A competent lawyer would attempt to have the charges dropped before a court appearance is scheduled.

c) Hacked account

Through online platforms such as eBay, fraudsters can hack existing seller profiles and use them to enter into fraudulent contracts using the stolen details. Often, hackers will search out those seller profiles which have a high rating. Indeed, in January 2013 a 34 year-old man from Bonn, Germany, received a six year jail term for having hacked 500 accounts for such purposes.

The general legal position is that an internet user is not liable for crimes committed by hackers through a stolen profile. Exceptions to this general principle include where the internet user has not sufficiently secured their account.

If your account has been hacked and fraudulently used to purportedly sell products, you should inform the relevant platform. A lawyer will be able to use the evidence of your hacked account to resolve the case in your favour.

a) Goods not delivered

It may be the case that you have ordered products online, but shortly before the products are due to be delivered the delivery date is repeatedly delayed. Alternatively, you may have already terminated the sales contract, but the date for refunding the purchase price has been delayed.

If it is discovered that the seller never had the intention to sell the product, it is a case of product-related deception.

However, sometimes such cases are simply an example of delaying tactics, employed by the shop due to supply or ownership problems.

Nevertheless, such delaying tactics are illegal and there are options to pursue your case. Contacting a lawyer is the first step to finding a solution.

b) Online product-related deception

The majority of online crimes concern some form of product-related deception. Due to the anonymous nature of online auction websites such as eBay, online consumers can easily fall victim to a product-related scam.

There are number of ways in which online shoppers can protect themselves:

  • Information

Find out as much information as possible about the seller.

Business sellers should disclose all relevant information including: their name, address, terms and conditions of sale, performance rights, returns policy, rights of withdrawal and delivery and payment conditions.

If such information is not available, there is reason to be cautious.

  • Do not pay in advance

Be wary of product offers which require you to pay in advance. Where possible, alternative payment methods, such invoice, bank transfer or direct debit, should be preferred.

  • Secure website

Ensure that when placing an order you are on a secured website. A secure website is represented by an “s” following the “http://” section of a browser’s address line.

If you require further advice on the topic of e-commerce and product-related deception you can contact Wilde Beuger Solmecke’s expert team on: 0221 / 951 563 0 (Beratung bundesweit)

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