An online campaign to donate money for an underprivileged centenarian in Beijing has been aborted after police confirmed the 101-year-old grandmother's plight was "not true".

All the funds received, nearly 2,000 yuan ($300) in total, have now been returned to the 40 generous netizens who donated charity to the account, with apologies from Alipay, an online payment company that set up the account for the fundraising campaign.

Chen Liang, the company's public relations director, told China Daily over the weekend that he never expected the company's goodwill would end up triggering a public dispute.

"We simply offered to help the elderly woman after hearing about her story," Chen said. "We never suspected it was a fraud."

Earlier this month, a note asking for help appeared on Tianya.cn, a popular Chinese online forum, saying a 101-year-old grandmother was found selling shoe insoles and other items near the west gate of Minzu University of China.

The note's author, who used the handle jjyy555ABC, claimed the grandmother's family had turned their backs on her and she was selling the items to achieve a basic standard of living.

The story was later posted on Sina Weibo, China's largest micro-blogging website, which soon received more than 1,000 hits.

Some netizens suggested on Alipay's official Weibo page that the company set up an account for online donations and the company complied, Chen said.

The police then learned the story about the grandmother was not true.

In a post on Nov 26, the police said on its official Weibo website that the 101-year-old woman sold the insoles "only for relaxation" and that she was well cared for by her family.

Chen said it is difficult to verify the authenticity of online appeals and that he is not the only one to have been left confused by the situation.

Wang Wubin, a 28-year-old Beijing resident who frequently visits Sina Weibo, told China Daily that he has frequently seen appeals for help on the site.

"But I never act on them," he said, adding: "Who can tell whether the stories are real?"

"Rumors and unverified information are increasing on the site now that it attracts more than 25 million posts from its 50 million users every day," said Mao Taotao, public relations director of Sina Weibo.

To tackle the problem, he said the micro-blogging service provider recently set up a special web page devoted to refuting false information and rumors.

"We still encourage our users to use Weibo as a platform for charity, but will be checking up on people's claims," he said.