Fighting fraud online under spotlight

Shanghai Daily, May 9, 2011

The proliferation of fake products being sold online jumped back into the spotlight after China Central Television recently reported that Taobao, China's biggest online marketplace, was allowing pirated and phony goods to be sold on its website.

In the report, a consumer accused Taobao of allowing vendors on its site to sell so-called genuine leather bags for around 180 yuan (US$27.70) when the bags were really made of artificial leather.

The Internet, due to its openness and fast transmission, disperses such exposés widely and stirs up a lot of public debate.

Jack Ma, president of Alibaba Group, which runs Taobao, is a defender of openness and transparency on the Internet, saying they provide the quickest and easiest channel to uncovering retailing fraud.

Taobao settled more than 2.1 million cases of customer complaints about faulty and fake products in the past year. That accounted for six of every 10,000 transactions that Taobao handled.

This year, the company doubled the size of its customer insurance fund to 200 million yuan to cover their losses in the event of refunds.

As vendors continue moving their business to the Internet, their information, including personal identification, bank accounts and mailing addresses, can be easily tracked.

To sell things at Taobao, a vendor needs to submit personal ID information that corresponds with the bank account used for receiving payment from buyers and verifying their mobile phone numbers.

Sellers of clothes, digital products and cosmetics, to name but a few items sold online, are also encouraging users to give feedback on their purchase and on the service they received - information made available to other customers.

That makes it pretty hard for a wrong-doer to last long.

At the end of April, the Ministry of Commerce, the Ministry of Industry and Information Technology, the Ministry of Public Security and six other government agencies urged local law enforcement authorities to step up their scrutiny of online shopping platforms that may be selling fake products or infringing copyrights.