Today, as I was poking around the Web, I found an article (hosted on Alibaba.com) by Tekle Sebhatu. Not sure who he is, but his article brought up some interesting points. Among them are points that are at the heart of cross-border e-commerce: it knows no boundaries:
As national boundaries become more permeable to trade and investment, so increases fraudulent activities. In the old days scammers used to meet face-to-face with people upon whom they prey. Now, modern technology has allowed con artists to globalize and to become more sophisticated using e-mail, message boards and chat rooms to effectively con individuals and businesses. A con artist can be anywhere at any time and he or she is just a click away from his 'mark", a term used by scammers to identify a victim. Anonymity, ease of promotion and reach on global scale that technology offers are contributing to the rapid expansion of fraud.
I also learned that the Nigerian Prince scams have a name: 419 scams:
419/Advance Fee Scam: Also known as a Nigerian or West African scam, this type of fraud is named after an article of the Nigerian penal code under which it is prosecuted.
This "the mother of all scams" scheme typically starts with a letter from Nigeria or another country that offers the recipient the "opportunity" to share between 20% to 40% of millions of dollars that the author, a former government official or relative of high ranking wealthy government officer, is trying to transfer illegally out of Nigeria. If the victim is interested then he will be asked to forward documents including **** number, blank company letterhead, telephone and fax number and other documents to make it look real. The possible victim is then asked to deposit money into a **** provided by the scammer to cover expenses and complete the process. The scammer uses the funds deposited in his account to commit other crimes.
Any online fraud is too much online fraud. One scam is too much.
How many emails have you gotten from a Nigerian prince who claims that you are a long lost relative and who wants to give you two million dollars, only if you will kindly hand over your bank account info?
This happens to me several times a day. Stuff like this is part and parcel of fraud and scams, especially on large e-commerce platforms. While I was trolling the web the other day, I found this short article on Alizila.com, addressing email spam from the Alibaba.com platform and what they are doing about it.
I think it's pretty clever with the zombie picture (although I would have chosen a Michael Jackson's "Thriller Video" screen capture). Have a read - email spam is a big part of fraud.
The fact that Alibaba.com is addressing this is big, so I am going to shamelessly cross-post this on my other blog.
Alibaba.com Slays Zombie Spam
Alibaba.com users receiving regular marketing e-mails from the B2B website have long complained that even when they try to opt out, the spam just keeps on coming, like some zombies and Facebook friends we know. Figuring that customers might appreciate an "unsubscribe" function that actually works, Alibaba.com is migrating to a new e-mail subscription management system that is a lot easier on users--including those who prefer to not hear from the company at all. The initial phase of the transition went live on Aug. 15. Now members are able to opt out of most of the marketing and advertising e-mails sent by the company with a few mouse clicks, and without having to log on to the Alibaba.com website, a requirement of the old system. Unsubscribing is equally easy for non-members who find themselves in Alibaba's marketing crosshairs.
All subscription changes should take effect within two days, which is a big improvement over never taking effect. Alibaba.com officials say they're working on further refinements to the subscription management system.
There are a bazillion ways to do e-commerce on the Internet, and two of the largest companies, Alibaba.com and eBay, have millions of users. Even if 99.9% of the suppliers are honest, that still leaves room for deceit and fraud. So rather than jumping into something with blinders on, I strongly recommend that you read up as much as you can and make yourself smart - know what to do and not do when setting up a site on Alibaba.
Alibaba.com has a Safety and Security Center - and it's worth repeating that if you do get scammed by a Gold Supplier, you can get some money back. But do your homework so you don't have to go through the process. Here's what they recommend:
Avoiding Using False Shipping Websites
Case description:
This company cheated me out of $2000 USD. Our terms were $200 USD for shipping, $1000 USD once the tracking info was verified and the balance of $1460 USD paid once the package was received. This guy said that he was going to use a local courier. He gave the website and tracking number for checking. When it showed "package now on hold in London", I sent $1000 USD as per the agreement. After that the company demanded the balance right away. He said his superiors wanted payment in full due to something about an audit and not being allowed to give credit to people from the USA. He said I needed to send at least $800 more and he'd take care of the rest. So I scraped up $800 more and sent it. Then he came with a new excuse. Something about a death in the family and if I wanted my package I needed to go ahead and pay the last $660! So basically, he's made up some fake business and website and is using it to con people into believing that there package is on the way. Then he puts the package "on hold" and says "if you want your package, I'm going to need more money".
Analysis of this case:
1. Avoiding use unknown shipping websites. It is a risky to allow unknown shipping websites to deliver your products. Before you accept this delivery method, do your own due diligence, including searching the shipping website on search engines to see what others have to say. Or you can go to http://www.whois.com/ to search for registered information of this website. Be wary if the domain of this website was created less than three months ago.
2. When your supplier is making excuses about the delivery (or lack thereof) of products and asking for additional payment, it is generally a trick.
3. Search the company name on the forum or search engine to find something useful to you. Or you can contact Alibaba's service team.
There is a lot of good, free information out there about e-commerce and e-payments. Many companies like eBay and Alibaba.com offer good advice, but sometimes, people want information from third-party sources.
Avoid Online Scams and Fraud:
Consumers Guide
As I have mentioned in the past and offered on my other blog, the U.S. Federal Trade Commission has some excellent tips and advice on how to avoid e-commerce fraud - so you don't end up needing something like the Alibaba Fair Play Fund.
The Internet has taken its place beside the telephone and television as an important part of people’s lives. Consumers use the Internet to shop, bank and invest online. Most consumers use credit or debit cards to pay for online purchases, but other payment methods, like “e-wallets,” are becoming more common.
The Federal Trade Commission (FTC) wants you to know about these payment technologies and how to make your transactions as safe and secure as possible. Keep these tips in mind as other forms of electronic commerce, like mobile and wireless transactions, become more available.
AND HOW WOULD YOU LIKE TO PAY?
Most online shoppers use credit cards to pay for their online purchases. But debit cards — which authorize merchants to debit your bank account electronically — are increasing in use. Your debit card may be an automated teller machine (ATM) card that can be used for retail purchases. To complete a debit card transaction, you may have to use a personal identification number (PIN), some form of a signature or other identification, or a combination of these identifiers. Some cards have both credit and debit features: You select the payment option at the point-of-sale. But remember, although a debit card may look like a credit card, the money for debit purchases is transferred almost immediately from your bank account to the merchant’s account. In addition, your liability limits for a lost or stolen debit card and unauthorized use are different from your liability if your credit card is lost, stolen or used without your authorization.
Other electronic payment systems — sometimes referred to as “electronic money” or “e-money” — also are now common. Their goal is to make purchasing simpler. For example, “stored-value” cards let you transfer cash value to a card. They’re commonly used on public transportation, at colleges and universities, at gas stations, and for prepaid telephone use. Many retailers also sell stored-value cards in place of gift certificates. Some stored-value cards work offline, say, to buy a candy bar at a vending machine; others work online, for example, to buy an item from a website; some have both offline and online features. Some cards can be “reloaded” with additional value, at a cash machine; other cards are “disposable” — you throw them away after you use all their value. Some stored-value cards contain computer chips that make them “smart” cards: These cards may act like a credit card as well as a debit card, and also may contain stored value.
Some Internet-based payment systems allow value to be transmitted through computers, sometimes called “e-wallets.” You can use “e-wallets” to make “micropayments” — very small online or offline payments for things like a magazine or fast food. When you buy something using your e-wallet, the balance on your online account decreases by that amount. “E-wallets” may work by using some form of stored value or by automatically accessing an account you’ve set up through a computer system connected to your credit or debit card account.
“PAYING” IT SAFE
The FTC encourages you to take steps to make sure your transactions are secure and your personal information is protected. Although you can’t control fraud or deception on the Internet, you can take action to recognize it, avoid it and report it. Here’s how.
Use a secure browser — software that encrypts or scrambles the purchase information you send over the Internet — to help guard the security of your information as it is transmitted to a website. Be sure your browser has the most up-to-date encryption capabilities by using the latest version available from the manufacturer. You also can download some browsers for free over the Internet. When submitting your purchase information, look for the “lock” icon on the browser’s status bar, and the phrase “https” in the URL address for a website, to be sure your information is secure during transmission.
Check the site’s privacy policy, before you provide any personal financial information to a website. In particular, determine how the information will be used or shared with others. Also check the site’s statements about the security provided for your information. Some websites’ disclosures are easier to find than others — look at the bottom of the home page, on order forms or in the “About” or “FAQs” section of a site. If you’re not comfortable with the policy, consider doing business elsewhere.
Read and understand the refund and shipping policies of a website you visit, before you make your purchase. Look closely at disclosures about the website’s refund and shipping policies. Again, search through the website for these disclosures.
Keep your personal information private. Don’t disclose your personal information — your address, telephone number, Social Security number, bank account number or e-mail address — unless you know who’s collecting the information, why they’re collecting it and how they’ll use it.
Give payment information only to businesses you know and trust, and only when and where it is appropriate — like an order form. Never give your password to anyone online, even your Internet service provider. Do not download files sent to you by strangers or click on hyperlinks from people you don’t know. Opening a file could expose your system to a computer virus or a program that could hijack your modem.
Keep records of your online transactions and check your e-mail for contacts by merchants with whom you’re doing business. Merchants may send you important information about your purchases.
Review your monthly credit card and bank statements for any errors or unauthorized purchases promptly and thoroughly. Notify your credit or debit card issuer immediately if your credit or debit card or checkbook is lost or stolen, or if you suspect someone is using your accounts without your permission.
REPORT PROBLEMS IMMEDIATELY
The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) establish protections against lost or stolen credit or debit cards, and procedures for resolving errors on credit and bank account statements that can include:
credit charges or electronic fund transfers that you — or anyone you’ve authorized to use your account — have not made;
credit charges or electronic fund transfers that are incorrectly identified or show the wrong amount or date;
computation or similar errors;
a failure to properly reflect payments or credits, or electronic fund transfers;
not mailing or delivering credit billing statements to your current address, as long as that address was received by the creditor in writing at least 20 days before the billing period ended; and
credit charges or electronic fund transfers for which you request an explanation or documentation, because of a possible error.
For credit
The FCBA generally applies to “open end” credit accounts — that is, credit cards and revolving charge accounts, like department store accounts. It does not apply to loans or credit sales that are paid according to a fixed schedule until the entire amount is paid back, like an automobile loan.
Lost or stolen credit cards: Under the FCBA, your liability for lost or stolen credit cards is limited to $50. If the loss involves only your credit card number (not the card itself), you have no liability for unauthorized use. It’s best to notify your card issuer promptly upon discovering the loss. Many companies have toll-free numbers and 24-hour service to deal with such emergencies. Always follow up with a letter and keep a copy for your records. Billing errors: The FCBA’s settlement procedures apply to disputes about “billing errors” for open-end accounts, including unauthorized charges (you cannot be liable for more than $50 for unauthorized credit charges); charges for goods or services you didn’t accept or weren’t delivered as agreed; charges that are incorrectly identified or show the wrong amount or date; math errors; a failure to properly reflect payments or credits; not mailing or delivering credit billing statements to your current address, if the address was received by the creditor in writing at least 20 days before the billing period ended; and charges for which you request an explanation or documentation, because of a possible error.
To take advantage of the FCBA’s consumer protections for errors on your account, write to the creditor at the address given for “billing inquiries,” not the address for sending your payments. Include your name, address, account number and a description of the billing error. Send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you. And if you send your letter by certified mail, return receipt requested, you’ll have proof that the creditor received it. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.
The creditor must acknowledge your dispute in writing within 30 days after it is received, unless the problem is resolved within that period. The creditor must con-duct an investigation and either correct the mistake or explain why the bill is believed to be correct, within two billing cycles (but not more than 90 days), unless the creditor provides a permanent credit instead. You may withhold payment of the amount in dispute and any related finance charges and the creditor may not take any action to collect that amount during the dispute.
For debit
The EFTA applies to electronic fund transfers — transactions involving automated teller machines (ATMs), debit cards and other point-of-sale debit transactions, and other electronic banking transactions that can result in the withdrawal of cash from your bank account.
Lost or stolen debit cards: If someone uses your debit card, or makes other electronic fund transfers, without your permission, you can lose from $50 to $500 or more, depending on when you report the loss or theft. If you report the loss within two business days after you discover the problem, you will not be responsible for more than $50 for unauthorized use. However, if you do not report the loss within two business days after you realize the card is missing, but you do report its loss within 60 days after your statement is mailed to you, you could lose as much as $500 because of an unauthorized withdrawal. And, if you do not report an unauthorized transfer or withdrawal within 60 days after your statement is mailed to you, you risk unlimited loss. That means you could lose all the money in your account and the unused portion of your maximum line of credit established for overdrafts.
Some financial institutions may voluntarily cap your liability at $50 for certain types of transactions, regardless of when you report the loss or theft; because this is voluntary, their policies could change at any time. Ask your financial institution about its liability limits. EFT errors: The EFTA’s error procedures apply to certain problems. This can include:
electronic fund transfers that you — or anyone you’ve authorized to use your account — have not made;
incorrect electronic fund transfers;
omitted electronic fund transfers;
a failure to properly reflect electronic fund transfers; and
electronic fund transfers for which you request an explanation or documentation, because of a possible error.
To take advantage of the EFTA’s error resolution procedures, you must notify your financial institution of the problem not later than 60 days after the statement containing the problem or error was sent. Although most financial institutions have a toll-free number to report the problem, you should follow-up in writing. For retail purchases, your financial institution has up to 10 business days to investigate after receiving your notice of the error. The financial institution must tell you the results of its investigation within three business days of completing its investigation. The error must be corrected within one business day after determining the error has occurred. If the institution needs more time, it may take up to 90 days, in many situations, to complete the investigation — but only if it returns the money in dispute to your account within 10 business days after receiving notice of the error, while it reviews your concerns.
For stored-value
The FCBA and the EFTA may not cover stored-value cards or transactions involving them, so you may not be covered for loss or misuse of the card. However, stored-value cards still might be useful for micropayments and other small purchases online because they can be convenient and — in some cases — offer anonymity. Before you buy a stored-value card or other form of e-money, ask the issuer for written information about the product’s features. Find out the card’s dollar limit, whether it is reloadable or disposable, if there’s an expiration date, and any fees to use, reload or redeem (return it for a refund) the product. At the same time, ask about your rights and responsibilities. For example, does the issuer offer any protection in the case of a lost, stolen, misused, or malfunctioning card, and who do you call if you have a question or problem with the card?
FOR MORE INFORMATION
Your financial institution, local consumer protection agency and law enforcement agencies like the Federal Trade Commission or your state Attorney General are among the many organizations working to help consumers understand electronic commerce and new online payment options.
The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
As I have mentioned in many other posts, Alibaba has something called their "Fair Play Fund" in which you can go through a process through which if you believe you have been scammed by a Gold Supplier, you can seek compensation.
fairplayfund@service.alibaba.com
There is a process though, just like eBay, because no company just hands out money.
Community members on Alibaba.com often help each other, so I found the post below through which you can actually start the process of discovering 2) if you are eligible for compensation, and b) how to go about it. Here's the source page:
As for your current case, our concerned colleague will follow up and take further check accordingly. Please wait a little longer for their reply.
Meanwhile, for other member who want to consult the details about your status of applying for fair play fund, please contact us by email to fairplayfund@service.alibaba.com
Please know the services that are available to help you!
As I have mentioned before, like other items, scams happen. Sure, they suck when they happen to you, but get this from the August 4 IT World article:
In its indictment, the FBI accuses Wallace of having gained illegal access to more than 500,000 user accounts using phishing messages that sent victims to sites that copied their user data and then spoofed their accounts as the supposed source of more than 27 million spam emails sent to Facebook members.
The lesson for me? If you are on Facebook, eBay, Aliexpress or Alibaba, there are millions of users of each. Odds are, unfortunately, that if even a micro-fraction percentage of users are scammers, it could result in thousands of victims.
I've written before about Alibaba's Safety and Security Center, there are concrete steps that you can take to avoid getting taken. And taken. And scammed, especially by dirtbags like this guy Sanford Wallace.
In an act of shameless self-promotion, here's a cross-post from my other site, Alibaba Fair Fund Facts.
If you have read this blog at all, you know that I am a total Alibaba Fan Boy. So I was surprised to find out that they have a news site that is different from their newsroom: a site called "Alizila" that says that it is news and commentary about and from Alibaba. Interesting concept.
So again, seeking forgiveness before permission, I've included a timely post below about fraud and scams. Its' called 'Sharks or Scammers: Who's the Top Predator?" I have posted highlights below, but it's sort of interesting to see how little (as a percentage) scams, rip-offs or fraud represents as part of transactions. Not that the Alibaba Fair Play Fund is perfect, but it's still an interesting study.
As we suspected, online shoppers in China are far more likely to be victimized by scams than they are to be eaten by sharks. We now know this because the China Internet Network Information Center just released a report containing the following statistical nugget: during the first six months of the year, 8 percent of China's online shoppers—38.8 million people—said they had indeed lost their lunch money to fraud.
Ergo, one out of every 12.5 e-shoppers gets skinned over a six-month period. The global odds of being killed by a shark in any given year are one in 252 million, give or take. Oh, and the odds that you live in China and are reading this blog: approximately one in 2.2 million, based on our latest Google Analytics traffic data. Congratulations on being a rare and discriminating individual.
While we are downloading random e-commerce stats, iResearch says that the transaction volume of online payments in China reached RMB 456.6 billion ($71 million) in the second quarter. We mention this because the year-over-year increase, at nearly 118 percent, is striking. We also mention this because iResearch found that Alipay, an affiliate of Alibaba Group, still holds almost 50 percent of the market, leagues ahead of No. 2 online-payments provider Tenpay with a 21 percent share.
The overall high transaction growth rate was due to the continuing rapid spread of e-commerce in China, particularly in online hotel and airline ticket booking, as well as the emergence of online financial and logistics services, iResearch says. Alipay in the quarter made rapid progress following the introduction of its Quick Pay service; the company also made inroads with major airlines. Tenpay has been a leading payment solutions provider in China’s group-shopping market.
Have you ever been a victim of scam emails? Is it difficult for you to tell scam emails and genuine emails apart?
Scam emails want to get your private information (i.e. Alibaba.com passwords, credit card numbers, or registration information). After you reply or click on a link contained in scam emails, your computer may become infected with viruses or Trojans designed to steal your private information. Your private information may be used to apply for credit cards or for other illegal activity that might harm your reputation.
If you have a Yahoo! Email account, Alibaba.com will help to protect you from scam emails. Whenever you open your Yahoo! mailbox to receive emails from Alibaba.com, you will see an Alibaba logo before the subject of each email or a key logo when you are browsing the email details. When using Yahoo!, any email without these logos is a scam and should be reported to our service team. See the following examples:
Alibaba.com will be working to cooperate with other email service providers to provide our members with an easier and safer way to avoid scam emails.
"Stolen Data" – one of the recent major data breaches included credit card numbers, and the fraudsters are using the data compromised email accounts is being used by the criminals to target consumers with really good phishing emails, referred to as spear phishing. The fraudster knows the consumer conducts business with a specific company.
The "Spear Phishing" – a major recent data breach that fraudster creates a targeted email from the company who conducts business with the consumer, and is able to collect enough information to compromise the consumer.
"Malware" – malware has spread and become more vicious. While the malware is more vicious, an impact on eCommerce has yet to be determined; although it may come in the future. Additionally, according to data on the APWG's website, malware for the past 12 months in the U.S. was 35.85 percent, and in the past 90 days was reported to be 25.48 percent. Based on these numbers, malware attacks are actually down according to the website.
"Fake eCommerce Donation Sites" – After researching this theory, it is believed the increase in fraud attacks is tied to fake donation sites that took advantage of the earthquakes and Tsunami in Japan. This belief is supported because the fraudsters have the exact information on the data elements for making purchases, and the accuracy rate is very good. Therefore, it is most likely the data is being collected from fraudulent sites that took donations from the devastating earthquakes and Tsunami in Japan. It is believed the fraudsters used social networks to promote the donation sites to expand their reach farther and faster than has been viewed in previous years.
1. It is an advanced fraud trick; the fraudster will use the psychology of the supplier to conduct fraud activities. He will place small orders first and transfer payment quickly to convince the supplier he is a good partner. Then he will place a large order and set a trap for supplier. Based on the good cooperation of previous business, the supplier will fall into the trap easily.
2. Always follow normal foreign trade processes when doing business with your partner.
It seems like a firm grasp of the obvious, but there are something like 56 million people who use Alibaba.com. Even if one tenth of one percent of those people (which would be better than the general population, BTW) are dishonest and want to scam you, preventing the fraud is the best way to go.
I spend a lot of time on Alibaba.com, trolling the site, and found one of their case studies on how to avoid the trap of getting ripped off. Info is below.
Fraud Case Study 1 - Gold Supplier Identity Theft
Case Description:
One of our buyers sent an email to Alibaba service team. It said: "I have received a quotation in my email; the sender said his company was a Gold Supplier. I knew Gold Supplier members are verified, so it gave me confidence in this transaction and I paid 30% deposit to buy the Ipods he provided. But after the payment, I didn't receive my Ipods, nor get any response from them. Their contact person, Tony Yang just seemed to ignore my emails. Please help me contact this company to either get a refund of my payment or send the items I paid for."
After checking with the Gold Supplier member mentioned by this buyer, the Tony Yang in this case wasn't an employee of this company at all. The so-called "Tony Yang" was a fraudster posing as a verified company’s representative to de-fraud innocent people on our website.
Be cautious of this type of fraud.
To avoid a similar situation, please adhere to the following advice:
1. Make your own investigation before dealing with your potential partner. Use the company name they provided to search Alibaba.com to find the company's website.
2. Compare the products listed on the company website. If they are in entirely different categories, for example; the company usually sells shoes but the offer you received is an Ipod, it might be a signal of fraud.
3. Contact the company on Alibaba directly and confirm with them whether the person contacting you is really from their company or not.
4. Or you can send email to the Alibaba service team; they will help you verify the contact person.
Found this trolling Alibaba.com. Again, if those of you who do import/export online or are interested in services like Alibaba or eBay, each service has a special level of seller. But just like other forms of identity theft, there can be Alibaba Gold Supplier Identity Theft.
Here's what I found on their site.
Be Cautious of Gold Supplier Identity Theft
Case Description:
One of our buyers sent an email to Alibaba service team. It said: "I have received a quotation in my email; the sender said his company was a Gold Supplier. I knew Gold Supplier members are verified, so it gave me confidence in this transaction and I paid 30% deposit to buy the Ipods he provided. But after the payment, I didn't receive my Ipods, nor get any response from them. Their contact person, Tony Yang just seemed to ignore my emails. Please help me contact this company to either get a refund of my payment or send the items I paid for."
After checking with the Gold Supplier member mentioned by this buyer, the Tony Yang in this case wasn't an employee of this company at all. The so-called "Tony Yang" was a fraudster posing as a verified company’s representative to de-fraud innocent people on our website.
Be cautious of this type of fraud.
To avoid a similar situation, please adhere to the following advice:
1. Make your own investigation before dealing with your potential partner. Use the company name they provided to search Alibaba.com to find the company's website.
2. Compare the products listed on the company website. If they are in entirely different categories, for example; the company usually sells shoes but the offer you received is an Ipod, it might be a signal of fraud.
3. Contact the company on Alibaba directly and confirm with them whether the person contacting you is really from their company or not.
4. Or you can send email to the Alibaba service team; they will help you verify the contact person.
The initial phase of the transition went live on Aug. 15. Now members are able to opt out of most of the marketing and advertising e-mails sent by the company with a few mouse clicks, and without having to log on to the Alibaba.com website, a requirement of the old system. Unsubscribing is equally easy for non-members who find themselves in Alibaba's marketing crosshairs.
