Thirty-six people in China have been arrested in conjunction with a wide-ranging investigation into fraud carried out through e-commerce websites, including China's largest e-commerce site, Alibaba.com.
Hangzhou police announced on 29th June that they had carried out a 40 day investigation into online scammers who posed as legitimate supplier's hosted by Hangzhou-based Alibaba.com and several other websites, including Made-In-China.com, EC21.com and ECPLAZA.net.
Hangzhou police, who carried out their investigation with assistance from Alibaba.com, allege that scammers used fake personal and business identities to open more than 100 "Gold Supplier" accounts on Alibaba.com.
This allowed them to pose as legitimate companies selling to overseas businesses through the Alibaba website.
Police say overseas buyers sent money for goods they never received, and they estimate the scale of the fraud to be over US$6 million.
Increasingly sophisticated scammers have committed fraud on a number of e-commerce websites in China. But Alibaba.com officials hope the announcement of the most recent investigation will act as a deterrent.
"The arrest of the suspects hits online scammers hard," according to Alibaba.com's CEO Jonathan Lu.
The investigation was prompted by action from Alibaba.com staff, who gathered extensive evidence of illegal trading activity on the website before taking the details to the police.
The Hangzhou police launched an investigation, which culminated in a series of raids from 11-15th April in Putian, Fujian province.
Most online scams are for relatively small amounts of money, and so often don't get reported. Those that do often get ignored by police due to the difficulties in tracking down suspects.
"Since the amount is small, buyers won't even bother to complain or report to the police," Jane Jiang, head of Alibaba.com's Trust and Safety department said.
Alibaba's reputation took a hit earlier this year when the company's CEO and COO were forced to resign in the wake of an outbreak of fraud, in which Alibaba.com employees were involved.
Since the resignations, the company has introduced a number of new procedures in an attempt to prevent a repeat of such cases.
According to the BBC, the number of fraud complaints received monthly by the website fell 70 per cent between February and June.
"We will continue to cooperate with defrauded buyers and police to pursue the investigation, arrest and sentencing of those who commit crimes using our platform," said Linda Kozlowski, director of Global Marketing and Customer Experience for Alibaba.com.
"If scammers think they can hide on the Internet and that no one will go after them, they are wrong."
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