KUALA LUMPUR, Sept 26 — The Domestic Trade and Consumer Affairs Ministry is mulling a special licence for online businesses to protect consumers from scams.

Its deputy minister Datuk Rosol Wahid said the government is looking at a comprehensive law to bring online businesses under control after cyber-fraud reports hit an all-time high.

"Online business and digital transactions are becoming a trend. It is important to ensure digital transactions and online businesses on platforms such as marketplaces, social media, websites and shopping apps are conducive and safe besides being user-friendly.

"We also plan to amend existing regulations to allow for the new licensing mechanism,” The Star reported him as saying.

Rosol said the ministry will study models used by countries such as the United States, China, Singapore and Saudi Arabia to monitor online businesses.

"The ministry is engaging online platform providers, consumer and seller associations, academicians and economists to ensure that every aspect, including consumer and seller protection and enforcement, can be effectively carried out,” he said, indicating that the proposal for the special licence had so far received positive feedback.

He added that the review was important, as for three consecutive years, the ministry recorded the highest number of complaints on scams involving online transactions.

This is an indication that there is an urgent need for stricter enforcement and legislation to safeguard the interests of consumers and also traders, he said.

"For the record, of the total 34,681 complaints in 2020, 11,511 were about online transactions. In 2021, of 27,469 reports received, 11,463 were related to online transactions.

"So far this year, 15,957 complaints have been received with 4,760 related to online transactions,” he said.

While awaiting new legislation, Rosol said enforcement personnel will come down hard on online scammers using the full brunt of existing laws.

Citing Section 2 of the Registration of Business Act 1956, he said under the law it required each online business to be registered with the Companies Commission of Malaysia, with offenders to face two years in jail or RM50,000 fine, or both.

Under the Act, online traders must display the individual/business or company name; business registration number; email, phone number or business address, main description of goods or services offered, full price including shipping fee, freight, tax and other costs; terms and conditions and estimated delivery time.

Those who fail to adhere to the Act face prosecution under the 2012 Consumer Protection Regulations (Electronic Trade Transaction).

Rosol said first-time offenders faced maximum fines of up to RM50,000 or imprisonment of not more than three years or both, with business entities facing double the maximum fine.

He added that individuals committing second offence or more can be fined a maximum of RM100,000 or jail of not more than five years or both, with a fine of RM200,000 for businesses.