Trading Websites Are Calling the Cops

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Trading Websites Are Calling the Cops



Alibaba.com and Taobao are upping the stakes in their fight against Internet fraud by working with Chinese police to send online scammers to the slammer. Alibaba.com, the world’s largest B2B e-commerce site, yesterday disclosed that a farmer from China’s Anhui Province has beengiven a three-year suspended jail sentenceand fined RMB70,000 ($10,633) foronline fraud, thanks to a case built by the Heifei city police in cooperation with the website’s safety and security team.

According toHeifei cityofficials, the case is the first successful public prosecution in China of an international Internet fraud. The farmer, surnamed Wang, was accused of setting up two fake companies offering cheap mobile phone memory cards on Alibaba.com to overseas buyers. Wang registered the companies on Alibaba.com using a false identity and phony business licenses, which enabled him tocheat buyers from Syria, Cyprus, the Ukraine and the Maldives of an estimated RMB107,795 ($16,375), according to Alibaba.com. Wang never filled buyers’ orders.

Wang, who was arrested in March, confessed to committing fraud during his trial, which began Jan. 11. He agreed to compensate buyers for their losses.Although sentenced to jail for three years, hewon’tserve time so long as he abides by the terms ofhis four-year probation period.Those convicted of fraud can face up to 10 years behind bars.

Like many trading websites that serve as open markets for B2B and B2C e-commerce, Alibaba.com and Taobao, China’s largest retailing platform, have been trying to keep a lid on scam artists and counterfeit-goods sellers operating on their sites. The toughest action the website operators can take is to remove product listings by members suspected of fraudulent activities. But scammers often come right back by simply setting up new fake companies.

Looking for a stronger deterrent, Alibaba.com and Taobao officials now say they will be cooperating with police to prosecute more scammers. On Jan. 24, Taobao announced it plans to regularly work with the criminal investigation team of the Hangzhou, China police department when it discovers cases of intellectual property infringement and other illegal activities. The company plans to provide leads and evidence to police using trading data captured by the website. Alibaba.com and Taobao are sister companies headquartered in Hangzhou.

“Alibaba.com will crack down on these Internet frauds who are impeding upon the development of e-commerce and destroying the public image of China’s small businesses,” said David Wei, Alibaba.com CEO, in a prepared statement. “We will never compromise. Combating Internet fraud will be the best way to ensure membership growth and to help honest small businesses grow and develop rapidly.”

AlibabaE-CommercefraudHangzhousecurityTaobao

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