The e-Commerce Association of Bangladesh (e-Cab) is considering suspension of Evaly's membership for allegedly cheating customers and merchants out of their money "through the illegal multi-level marketing (MLM) business in the guise of e-commerce business".
e-Cab sent a show-cause letter to Evaly's Managing Director Mohammad Rassel on Wednesday, asking why his company's membership should not be suspended following complaints from the Bangladesh Bank through an inspection report, the commerce ministry, the Directorate of National Consumer Rights Protection, and many buyers and merchants, e-Cab's Vice-President Mohammad Sahab Uddin told The Business Standard.
"Evaly has been asked to respond within seven working days upon receiving the letter. We have sent a show-cause letter to suspend its membership as per e-Cab's policy framework," he said.
e-Cab got a lot of complaints of irregularities in the thriving e-commerce sector against Evaly from customers and merchants. Different media outlets also ran reports on its anomalies, according to the letter signed by General Secretary of e-CAB Abdul Wahid Tomal.
According to the e-Cab evaluation committee's report on Evaly's business, the e-commerce site has not taken any initiative to improve its customer service quality. Besides, there is also an allegation that Evaly is not abiding by the newly issued e-commerce operation guidelines, the letter said.
e-Cab has also taken steps to suspend or cancel memberships of other companies that are cheating customers by doing the MLM business.
The association has sent show-cause letters to Green Bangla E-Commerce Limited, Annex World Wide Limited, Amar Bazar Limited, Excellent World Agro-Food and Consumers Limited. Preparations are underway to send show-cause letters to several other companies, according to sources.
e-CAB officials said the letters were issued as there is a provision of seeking an explanation before suspending or cancelling membership in the e-Cab's policy.
Sahab said they are sending show-cause letters to all the 10 companies with which various banks suspended the use of their debit and credit cards for transactions.
To exploit the potentials of the booming e-commerce sector and increase customer confidence, they will suspend the memberships of the companies which are operating under the MLM system.
Seeking anonymity, a senior e-Cab official said the way some e-commerce companies, including Evaly, are taking advance money from new customers and giving products and refunds to old ones is not an e-commerce business.
Evaly has not delivered products against Tk215 crore in advance payments from customers. Moreover, the company owes Tk189.85 crore to merchants from whom it bought products, he also said.
The merchants are not supposed to be unpaid as customers have made payments in advance. But Evaly cannot meet liabilities to customers or merchants, he pointed out, questioning, where did such a big amount of money go?
Such anomalies of various e-commerce companies, including Evaly, have led to customers losing confidence in the entire e-commerce sector. Thus, those who are doing businesses complying with rules and regulations are being affected.
Many e-Cab members also lodged complaints against the companies. So, the membership of e-commerce companies doing business in the MLM system will be first suspended and later cancelled.
e-Cab has about 1,100 members, of which, 14 big companies are allegedly operating MLM businesses in the name of e-commerce.
The Bangladesh Bank has already got Evaly's bank account information. The central bank has also sought account details of 11 other e-commerce companies from banks and non-banking financial institutions.
They are Alesha Mart, Dhamaka Shop, Sirajganj Shop, Aladiner Prodip, Boom Boom, Adyen Mart, Needs, Qcoom, E-orange, Dalal Plus and Bajaj Collection.
Meanwhile, the Criminal Investigation Department (CID) has sent a letter to the Bangladesh Bank, requesting that it freeze Dhamaka Shop's bank accounts.
CID additional deputy inspector general Kamrul Ahsan told TBS, "We wrote to the Bangladesh Bank on Thursday to freeze Dhamaka's bank accounts as part of an ongoing investigation into activities of various e-commerce companies."
According to sources, like the popular e-commerce platform Evaly, there are allegations against Dhamaka that it is not providing products or refunds to customers on time despite taking advance payments.
On the heels of a report published on 22 June by The Business Standard based on the central bank's report on Evaly, a number of banks, including Dhaka Bank, Bank Asia and Brac Bank, suspended the use of their debit, credit and prepaid cards for online transactions with 10 e-commerce companies.
On Wednesday, various popular brands, such as Trendz, Rang Bangladesh, Artisan Outfitters, Fit Elegance, Rio International, decided not to allow the redeeming of Evaly's gift vouchers on account of not getting payments from the e-commerce company.