Consumer court directs Amazon to pay Rs 40k refund over hacked smartphone

Amazon Retail was fined by a consumer court after it was discovered that the smartphone she purchased was hacked, leading to data exposure and unauthorised transactions

The District Consumer Disputes Redressal Commission has directed Amazon Retail India to refund Rs 40,325 to a woman after it was discovered that the smartphone she purchased was compromised, leading to data exposure and unauthorised transactions, according to a report by The Times of India.

In addition to the refund, Amazon has been penalised Rs 18,000 - Rs 10,000 as compensation for mental distress and harassment, and Rs 8,000 to cover legal expenses.

Hacked phone sold to customer by Amazon

The consumer, Sumita Das from Sector 12, Chandigarh, purchased a smartphone through Amazon. However, she soon faced financial losses when the device was compromised, leading to fraudulent transactions, The Times of India said. In September 2023, cybercriminals gained access to her personal data via the hacked phone, making unauthorised purchases from her Amazon account. Additionally, her ICICI Bank credit card and email account were hacked, as per the report.

Das claimed that despite notifying Amazon about the suspicious activities, the company did not take prompt action to cancel the fraudulent transactions or provide adequate support.

Despite Amazon initially indicating it would cancel the fraudulent transactions and refund the amount, Das reported that she had not received the refund at the time of the complaint.

Amazon’s response to the allegations

Amazon India, along with Amazon Pay Later — the platform through which the payments were made — defended their actions in their response to the consumer court. They stated that all fraudulent orders were cancelled and claimed they had provided ‘proper and efficient assistance’ to the customer.

“Upon receiving the complaint, we promptly checked internally and helped the customer secure her account, ensuring no further fraudulent activity occurred,” their statement read.

What did the court say?

Despite Amazon’s defence, the court ruled in favour of the complainant, stating that it is standard practice for delivery agents of online platforms to verify a product before handing it over. The court noted that Amazon had failed to act swiftly when informed of the suspicious activity.

Amazon faces broader investigations in India

Separately, in an ongoing investigation, Reuters reported last month that the Competition Commission of India (CCI) found that Amazon had violated local competition laws. The CCI’s 1,027-page report concluded that Amazon and another e-commerce platform favoured certain sellers, giving them a higher ranking in search results and sidelining other sellers.

This probe was initiated following a complaint by the Delhi Vyapar Mahasangh, an affiliate of the Confederation of All India Traders (CAIT), which represents 80 million retailers across the country.