Social commerce platform Meesho and its logistics partner Shadowfax have been served a legal notice over the alleged ghost orders scam, where resellers on Meesho send fraudulent orders to people who have never placed them. This alleged ghost orders scam on Meesho was first brought to light by Entrackr last month in an investigative report.
The legal notice has been served by Bengaluru-based intellectual property law firm BananaIP, alleged Meesho of placing orders on its platform on behalf of unsuspecting customers for financial gain.
It has separately also sent notice to Google to take down Meesho’s app from its app store for allowing such fraudulent practices to happen via its app.
The law firm first sent a notice to Shadowfax on August 5 after one of its senior employees fell for the fake orders scam. However, after not receiving any response from the logistics company, it sent a second legal notice on August 9, this time also marking Meesho for allowing such frauds to happen.
“As soon as Meesho received the legal notice, we immediately initiated both our customer and legal teams. Our customer team has already initiated the refund and the legal team is in the process of responding to the legal notice. We are very cognisant of the situation and will take appropriate actions,” a Meesho spokesperson said in response to Entrackr‘s queries about the legal notice.
“We categorically deny any involvement in such kind of fraudulent behaviour, and carry out deliveries to consumers verified by our clients,” Abhishek Bansal, co-founder and CEO of Shadowfax told Entrackr in a statement.
“We are providing complete support to Meesho to help process refunds for such aggrieved consumers at the earliest, and also to build strong processes to prevent such incidents in future. We are a law-abiding organisation and shall extend all support to the authorities investigating this matter,” Bansal added.
Entrackr was the first to bring to light this alleged fake orders scam being run on Meesho in an investigative report on July 14. The story drew a wide-ranging impact with users flooding social media to share their experiences of being scammed by Meesho’s ghost orders.
In fact, the report and the subsequent furore over Meesho’s business practices also resulted in a complaint being filed against the company with the Central Consumer Protection Authority (CCPA).
NCR-based activist-lawyer, Ajay Kumar Singh, who had earlier filed a PIL against social commerce companies for not conforming to e-commerce rules drew the attention of CCPA towards this scam. In a detailed letter marked to Nidhi Khare, Chief Commissioner, CCPA, he raised the issue of unsuspecting citizens being swindled into paying for products not ordered by them.
The complaint included numerous screenshots of people sharing how they received orders from Meesho which they had never placed in the first place. It alleged that the company makes it very difficult for people who end up accepting these orders to “claim a refund by confusing the issue between the reseller, sellers & courier companies”.
Queries sent to Meesho on the consumer complaint earlier this month did not elicit a response from the company at the time of publication.
Since Entrackr took the lid off from the ghost orders scam, Meesho’s public stance on the issue has seen shifting goalposts.
After the story was first published, Meesho, rather dismissively of its findings, had said that “such orders don’t even comprise 0.01% of the total orders received on Meesho’s platform”.
However, after subsequent pressure on the company ratcheted up with users asking questions of the company’s practices, and after BananaIP sent Meesho a legal notice, it acknowledged that there is an increase of such fraudulent orders on its platform.
“We are taking a No-Tolerance approach to these cases. We have deployed Data Science models to identify and block accounts of such miscreants. We also have an extensive grievance redressal process across all social platforms to act quickly on all cases possible,” said Meesho’s founder and CEO Vidit Aatrey in a post last week.
For social e-commerce firms that live and die by their transaction numbers, such issues need to be nipped in the bud, rather than waiting for users, and perhaps investors, to demand it.