Even though 80 per cent of e-commerce scams in the first half of this year took place on its platform, Carousell said the cases account for only a small percentage of its transactions.

But it added that it has taken steps to tackle the issue, including introducing a new and safer payment system.

The popular online selling platform noted that more than 99.9 per cent of transactions are fraud-free.

"We take a very serious view towards fraud and actively monitor our marketplace for potentially fraudulent listings, and our proportion of reported scams is a direct result of being the leading online marketplace in Singapore," said a spokesman for the company.

Mid-year crime statistics released by the police yesterday showed that the number of e-commerce cheating cases went up by 58 per cent. Of the total 1,277 cases lodged, 1,020 cases took place on Carousell.

Carousell said it recently launched a new and safer form of payment system, called CarouPay.

Launched in June, CarouPay operates as an escrow service, freezing and holding on to funds in the event of a dispute, such as when buyers do not receive their purchases from the sellers. The money will be released only when the two parties have reached a resolution.

This, the police said, could help address a common method of e-commerce scams, where buyers do not receive their purchases and sellers disappear after receiving their payment.

"The new payment system not only makes transactions hassle-free but also provides greater assurance by allowing insight into fraudulent transactions. This allows us to help our users settle disputes and get their money back," said the Carousell spokesman.

The company said it also uses technology and artificial intelligence to identify potentially fraudulent activities on its platform.

In addition, it runs educational campaigns and has dedicated teams that look out for suspicious activities on the platform.

Dr Wong King Yin, of Nanyang Technological University's College of Business, said the platform is especially popular among scammers as it has many users and is mainly a consumer-to-consumer platform.

While other e-commerce platforms require sellers to register their businesses, and will oversee the payment and delivery process, Carousell does not, he added.

"Carousell was originally built to connect sellers and buyers of pre-loved items, so they did not plan to oversee the whole payment and delivery process. They let the sellers and buyers handle it themselves," said Dr Wong. "In this case, scammers can easily take advantage of it."

Cara Wong