Govt ducks question on use of AI to ‘prevent’ e-commerce fraud, even as consumer complaints surge 6x in last five years

The Indian government has been evasive about its use of artificial intelligence (AI) to detect and prevent e-commerce fraud, despite a surge in consumer complaints. Last week, the Ministry of Consumer Affairs avoided answering a parliamentary question about whether the government has developed AI tools to counter fake products and brand fraud on online platforms. The ministry focused instead on its AI-enabled National Consumer Helpline, which has seen complaints grow nearly sixfold in the past five years.

Congress MP Imran Masood asked the government to clarify whether an AI monitoring system exists to prevent counterfeit products and brand fraud on e-commerce platforms. He also sought details on the system's working mechanism, whether it is linked to the consumer grievance redressal mechanism, and if it has reduced complaint resolution time.

The Consumer Affairs Ministry's response did not directly address the use of AI for detecting and preventing fraud. Instead, it highlighted the AI-based features of the National Consumer Helpline, such as speech recognition, translation systems, and an AI-enabled chatbot. However, these tools operate at the pre-litigation stage and do not directly detect fake products or fraud.

The government's non-answer is particularly concerning given the significant increase in consumer complaints. The National Consumer Helpline, which is AI-enabled, has become a critical platform for registering grievances. But the lack of clarity on whether AI is being used to prevent fraud raises questions about the government's proactive measures to protect consumers from online scams.

E-commerce fraud has become a major issue in India, with consumers increasingly vulnerable to fake products and brand infringement. The surge in complaints underscores the need for robust preventive measures. The government's failure to address the AI question could imply that such systems are not in place or that they are not yet operational.

Consumer advocates have called for transparency and stronger protections against e-commerce fraud. They argue that the government should invest in AI technologies that can detect and prevent fraud proactively, rather than relying solely on complaint redressal mechanisms. The Ministry of Consumer Affairs needs to clarify its stance on AI usage and outline any plans to develop systems that can effectively prevent fraud before it occurs.

In the meantime, consumers are left to navigate a landscape where fraud is on the rise, and the government's response remains unclear. The focus on complaint tools is important, but it does not address the root cause of the problem. The need for a comprehensive approach that combines prevention and redressal cannot be overstated.

As e-commerce continues to grow, so too does the potential for fraud. The government must take a proactive stance and leverage AI to detect and prevent fraud, ensuring consumer protection is a top priority. The evasion of the parliamentary question raises doubts about the government's commitment to addressing this critical issue.

In conclusion, the Indian government's refusal to answer whether it uses AI to prevent e-commerce fraud is troubling, especially as consumer complaints have surged sixfold in the last five years. The Ministry of Consumer Affairs needs to clarify its position and outline any plans to develop AI-based systems that can detect and prevent fraud proactively. Without such measures, consumers will continue to face significant risks, and the government's role in protecting them will be called into question.