Police headquarters' probe report on Evaly
- Evidence of at least eight types of fraud and irregularities found
- Existing law has provisions for imprisonment for a maximum of seven years for such offences
- Instructing Evaly to do business as per existing laws, policies suggested
- Directing Evaly to mandatorily introduce cash on delivery suggested
- Instructing Evaly to submit a monthly report on orders, deliveries suggested
- Allegations found: 1) Not delivering products on time 2) Not keeping proper contact with customers 3) Not returning advance payments in case of failure to deliver products 4) Offering e-balance instead of cashback
The home ministry has found evidence of violations of various laws by Evaly, an e-commerce platform that was in the spotlight last year for numerous alleged irregularities.
An investigation team of police headquarters has found evidence of at least eight types of fraud and irregularities by the company. The existing law has provisions for imprisonment for a maximum of seven years for such offences.
The commerce ministry wrote to the home ministry in September last year, and the police headquarters were then given responsibility for conducting the investigation.
Based on the probe, the home ministry sent a report to Commerce Secretary Md Jafar Uddin on 12 January this year. In it, the ministry recommended that the commerce ministry instruct Evaly to do business in accordance with existing laws and policies of the commerce ministry as well as the Directorate of National Consumer Rights Protection.
Md Hafizur Rahman, head of the digital commerce cell under the commerce ministry and additional secretary at the ministry, told The Business Standard he could not comment on the matter as the home ministry report had not reached him yet.
When contacted, Evaly Chief Executive Officer Mohammad Rassel declined to comment.
The ministry also requested the commerce ministry to direct Evaly to mandatorily introduce cash-on-delivery instead of customers paying in advance when ordering products.
This will remove the dissatisfaction of both consumers and traders, the report said.
The report was based on interviews with customers who had not yet received products or refunds after making advance payments six to seven months ago as well as reviews of the existing laws in this regard.
It suggested that the complaints made by customers about not getting products or refunds even after making advance payments and not being able to use gift cards be investigated by the organised crime division of the Criminal Investigation Department (CID) of police.
The report recommended that Evaly be instructed to submit a monthly report to the commerce ministry or the consumer rights protection directorate on how many orders it has received and how many products it has delivered.
The investigators found allegations of not delivering products on time, not keeping proper contact with customers, not returning the advance payment in case of failure to deliver products and offering e-balance instead of cashback.
They also found evidence that money received through cashback offers was added to e-wallets instead of being returned in cash or to bank accounts, and that customers were not allowed to use 100% of the e-balance to purchase products.
The report said low-cost and substandard products as well as products different from what were originally ordered are often delivered.
The liability for these crimes rests with the company owner as per Digital Security Act 2018, the report added.
No cashback, delivery even in six months
Buyers have complained to the consumer rights protection directorate that they neither received the products they had ordered nor any refund within the stipulated time even after making advance payments. Investigators interviewed the complainants by collecting their names, addresses and mobile numbers from the consumer rights protection directorate.
Fifteen buyers who ordered products between November 2019 and July 2020 complained that they did not receive the products or any refund even in October even though the company had promised to deliver the products within a maximum of 45 days.
Rampura Mahanagar project resident Md Saifullah ordered a Tk119,445 scooty but did not receive it even after the passage of 116 days.
Sunamganj Bilpar area resident Md Zillur Rahman paid Tk59,340 after ordering a refrigerator in July last year. The offer was later discontinued but the product was not delivered. He did not get back the money either.
Md Ferdous Fakir of Sonapara village in Narayanganj's Rupganj upazila ordered a laptop on 6 June last year. He has not yet received the product or got the money back even though he was supposed to get the device within 45 days.
Anisur Rahman, a resident of east Bashabo in the capital, ordered a GEC fan, three mobile phones, a weight scale, an oven and a bag on 16 June last year and paid Tk84,278. He has not yet received any of the products.
Police have found evidence of many such cases.
Irregularities in the name of gift cards
According to the investigation report, Evaly's gift card offer is one of the most tempting ones. For example, if a buyer pays Tk6,500 in cash and buys a gift card, a balance of Tk10,000 is credited to his Evaly account.
If he does not purchase any product by using that balance within the stipulated time, it becomes invalid.
Md Roknuzzaman, a resident of Amchattar village in Rajshahi's Shah Makhdum thana, told the investigation team he had bought two Evaly gift cards for Tk55,000 but had not been able to buy any product by using them yet.
He can no longer use more than 60% of the balance of the cards, which are also nearing their expiry dates. He did not receive any satisfactory response even after contacting Evaly in this regard.
Committing offences under existing laws
Although there is no separate law on operating e-commerce businesses in the country, a failure to deliver products on time after receiving advance payments is a "criminal breach of trust" and "fraud" under Penal Code 1860 and Consumers' Rights Protection Act 2009.
The home ministry report said there is a provision for a three-year imprisonment for criminal breach of trust and one year for fraud.
The Consumer Rights Protection Act provides for imprisonment of up to one year or a fine of Tk50,000 or both if a product or service is not properly sold or delivered after a consumer has paid for it.
The home ministry said Evaly does not communicate properly with its customers through hotlines, support emails, the Evaly application and social media. Such incidents are punishable under the Consumer Rights Protection Act.
The law says if negligence, irresponsibility or carelessness on the part of the service provider results in loss of money or health of the customer, this could lead to imprisonment for a term not exceeding three years or a fine of Tk2 lakh or both.
In addition, Section 418 of Penal Code1860 states that an offender who is obliged to protect the interests of a person may be subjected to imprisonment for a term not exceeding three years if he cheats knowing that the person will face losses or be harmed.
The home ministry report states that not fully allowing the money received from cashback to be used for buying products from e-balance is a "fraud" and said this could be punishable by up to seven years in prison under Section 420 of the Penal Code.
According to the report, there is a provision for imprisonment in the Penal Code and the Consumer Rights Protection Act even for promising a product and delivering a different one.
37 lakh subscribers, monthly transactions Tk300 crore
Evaly formally commenced its journey on 16 December 2018 after taking registration from the Office of the Registrar of Joint Stock Companies and Firms on 14 May that year. It started with a paid-up capital of Tk50,000, and its current paid-up capital is Tk1 crore.
Evaly now has more than 37 lakh registered customers and its monthly transaction is around Tk300 crore. At present, about 25,000 vendors are associated with it.
Evaly initially introduced Voucher, a system that offered cashback up to 200-300% for various products. At present, cashback up to 100-150% is offered.
The company receives a commission by selling around 4,000 types of products, including mobile phones, motorcycles, refrigerators, televisions, cars and flats, on its platform.
Evaly's payment system is not like that of other e-commerce firms in the country. It does not offer cash-on-delivery facilities. The full price of a product has to be paid in advance.
The company's founder Mohammad Rassel completed his bachelor's in statistics from Jahangirnagar University. He then obtained an MBA degree from the Institute of Business Administration under the University of Dhaka.
He launched Evaly after working at Dhaka Bank for about two years.