While the absence of law is a problem, an abundance of laws, one overlapping the other, or a corpus inadequate to cope with evolving issues, also is of little help.
Things turn even more complicated when several authorities are mandated by laws to oversee specific areas and each of them expects 'somebody' to take action.
A business starts, takes shape and grows from small to big to bigger and one day the bubble bursts.
All these happen under the nose of the authorities and under a legal regime.
There are consumer protection laws and anti-competition law on top of the century-old Code of Criminal Procedure that adequately covers fraudulency in trade. There are separate authorities like the Directorate of National Consumer Rights Protection and the Bangladesh Competition Commission in addition to the commerce ministry to oversee that businesses run on fair practices and consumers are not cheated.
But these laws neither protect consumers, nor genuine businesses from fraudsters.
Authorities, too, do not act until the victims speak out on social media or go for legal measures.
This is what the higher court noted in the case of abuses or misuses of e-commerce platforms by some entrepreneurs.
The High Court (HC) on Monday blasted the government's delayed actions against fraudulence by some e-commerce companies.
"The government is taking steps, but when? When I already lost everything… The thieves are arrested only after cases are filed," an HC bench said while hearing a writ.
In its observation it said when consumers do not get a remedy or their money back, "it does not matter that the accused persons are being arrested or jailed."
The higher court's observations came amid a series of developments in the country's ecommerce domain, shaking public trust in this flourishing tech-based business model.
Evaly, eorange, Dhamaka Shopping etc. are names that have put the whole business model in question.
In each case, the technique is the same – offering extraordinary discounts on products to lure consumers to pay in advance and then keep them waiting either for the promised goods or for any refund.
In the last couple of weeks, another scam was unearthed; a never before heard company, Ehsan Group has embezzled an unbelievable amount of Tk17,000 crore it reportedly collected as private deposits through a network of clerics.
In fact, these types of incidents are not new, nor are they being heard for the first time.
There are a lot of precedents still fresh in memory – entities like Jubok, Unipay2, and Destiny, which grew rapidly and then collapsed between 2006 and 2012, with lakhs of clients losing their money amounting to thousands of crores of Taka.
Those businesses were operated openly and the fraudsters managed to rope in leading professionals as prominent guests in their annual events. They sponsored social, cultural and sporting events, erected billboards extolling themselves, published advertisements in the media, and even became publishers of newspapers, positioning themselves as high profile companies in people's minds.
Cases were filed, top brasses put behind bars and, in some cases, their properties were confiscated, but cheated clients have not got their money back.
Though there are no specific laws to regulate MLM and e-commerce businesses, authorities framed guidelines for these emerging business models. Had those guidelines been enforced, fraudulence under cover of these business models could not have been repeated.
The Consumer Protection Act 2009 makes deceiving consumers with false advertisement and not delivering promised goods and services punishable by one year in jail and also provisions a penalty of up to Tk2 lakh.
Designated officials of the consumer protection directorate are empowered to shut down businesses and initiate proceedings under the criminal act.
The directorate claims success in settling thousands of complaints and helping customers get compensation. In the 2019-20 fiscal year, it received over 9,000 complaints – a significant number of them against Evaly and others, and claimed to have settled 83% of those.
But the job of the directorate is not just settling complaints, it is supposed to close business and punish the offenders for repeating the same crimes.
The Competition Act 2012 empowers the competition commission "...to eliminate practices having adverse effects on competition in the market and to ensure freedom of trade." The commission can inquire into "...either on receipt of any complaint or on its own initiative."
This act prohibits "purchase or sale of goods or services" at discriminatory price or predatory price (a price which is below the cost of production).
The Commission, which may exercise the same power as a Civil Court both under the Code of Civil Procedure and the Code of Criminal Procedure, can summon anyone for hearing and ask for accounts or other documents related to any trade.
The authorities do not need to wait for someone to lodge a complaint, they can act on their own, which they did not.
So having stringent laws and enforcement agencies with adequate power does not necessarily mean that victims of trade frauds will get remedies.
Some ecommerce stores offered discounts in the range of 80% to 150%. Promised goods were not delivered many months after consumers paid in advance. Cash deposits were taken from people with promises of high returns that never materialised.
All these are offences under the laws. But wrongdoers are safe until someone goes to the police or a court.
The commerce ministry is planning to register ecommerce platforms and Facebook-based businesses online and provide those with unique identification numbers.
Calls are being heard for creating a 'Fair Trade Commission.'
In the near future, ecommerce law may be enacted to fill in a legal vacuum. A separate commission or authority may be created to regulate online businesses.
But consumers are less likely to stay protected if authorities are not proactive in their actions, precluding any sort of trade fraud from taking place.
While the Covid-19 pandemic led businesses to devise innovative ways to improve supply chains and global policymakers including OECD initiated the B4IG ('Business for Inclusive Growth') campaign to protect both customers and producers, we are grappling with an old menace.
The failures of authorities to ensure business discipline and compliances have put a widely-adopted business model, which has proved its efficacy most during the pandemic, in question in Bangladesh.