Avoiding Use of the Alibaba Fair Play Fund: Prevention

An ounce of prevention is worth a pound of cure.  Buying and selling online is complex, especially when you take into account different cultures, languages and time zones.

Alibaba.com offers a lot of advice (that is scattered all over their web site), so from time to time, I'll offer some information that appears in different parts of the site.

Advice on how to prevent fraud
on Alibaba.com

And just to be clear:  use of the Alibaba Fair Play Fund should be a last resort.  Doing your homework, knowing your suppliers and having a true understanding about how the process works are your best protection against suffering from fraud or scams.

So here's a case study on fraudsters who provide false information.  I have taken this from the Alibaba Fraud Case study web site section.

Case Description: 

"I didn't receive the products. The supplier said the goods were detained in the Customs Office because Customs didn't find the original invoice attached to the goods. The supplier explained that it's his company's policy was to issue original invoices only when quantities are above 5 units. He told me to pay for another 2 units for another $150 USD, but I have refused. I paid by Western Union. He registered on your website as a US company, but actually it is a Chinese Company. All his information is fraudulent. His is a fraudulent company!"

Case Analysis:

1. It is a sign of potential fraud if the seller requests you to send payment to another country instead of his registered country showed on the website. e.g., the company claims to be a UK company and requests you to send payment to Nigeria, or other African countries. 

2. If you think their price is very attractive and want to deal with them, it is necessary for you to verify that they are legitimate company and their contact information is correct. In this case, the fraudster is pretending to be a US company, but all his registered information is false. This can be judged easily by calling his company telephone number or by searching the company name on related state government websites. 

3. The fraudulent company will always find some excuses, such as their products are detained by Customs Office for some reasons, and ask buyer add more payment to release the products. Be cautious and make your own decision when your seller tells you such things. 

4. Western Union is a dangerous payment method, it can be picked up anywhere in the recipient's country, with no way of tracing the person who picked it up. The criminal remains anonymous. So it is a commonly used payment method for con-artists. So try to avoid adopting this payment method and consider other more secure payment methods like escrow. 

FAQ About the Alibaba Fair Play Fund

FAQ Regarding Alibaba's Fraud and Dispute Procedure and the Fair Play Fund

Here's a good "how to" for report fraud and make a complaint to the Alibaba Fair Play Fund.

How do I report a fraud case?

1. Go to http://channel.alibaba.com/complaint/home.htm
2. Sign in with your registered Alibaba.com email and password
3. Complete the necessary information and submit

If you do not have an Alibaba.com account yet, please click here to register with the email address you used to contact the party you wish to complain about.

You can view updates or provide further information after successfully submitting your complaint on our Complaint Center.

Case handling procedure: 
1. Collect evidence from the buyer.
Depending on case type, different evidence may be required such as below:
a) Payment document (bank slip, etc.)
i.   Payment via bank transfer (T/T): Must have bank stamp/chop
ii.  Payment via Western Union: Must include MTCN
iii. Payment via online banking: Screenshot of the entire transaction page. Must include URL and payment status
iv.  Complete correspondence between both parties
b) Delivery documents
c) Contract or Proforma Invoice
d) Third-party inspection documents
e) Photos of products received including delivery package

2. Case substantiated.
a) Alibaba.com will request the supplier to submit evidence to counter the complaint within 2-3 working days.

3. Solution.
a) If we consider the complaint to be a normal trade dispute, we will inform supplier of the dispute and ask them to contact you within 3-5 days.
b) If we consider the complaint to be valid (the supplier is suspected of fraudulent activities), we will suspend the supplier's account for 15 days.
c) If the complaint is not resolved within the suspension period; the supplier's account will be terminated and blacklisted. Buyers who filed complaints resulting in the removal of a Gold Supplier from Alibaba.com will be eligible for a payout from our Fair Play Fund.