Forty-four suspects who committed online fraud against shop owners on taobao.com and allegedly profited over four million yuan (2,000) have been arrested, Shanghai police said yesterday.
The gang, based in Guilin in Guangxi Zhuang Autonomous Region, sold a software which they claimed could help improve product search results on the most popular online shopping site in China but police said it didn't work at all.
At least 4,300 shop owners from various parts of the country have been tricked since May 2014 when the gang, headed by a 28-year-old brother and a 31-year-old sister registered their tech company called Shenlan.
Police in Shanghai's Huangpu District started investigation in November last year when one of the victims, a woman surnamed Liu, said she lost 4,800 yuan to the scammers who sold her the software in August.
Like other victims, Liu was contacted by the gang on cxt.1688.com, an Alibaba instant messaging platform for businesses. The gang charged customers 200 yuan to try the software and they had to pay 4,800 yuan to buy it. The gang ignored the victims' requests for refund, police said, adding that the gang was caught in March.
Police said they engaged a third party to test the software which doesn't work in placing the product higher on search results.
Taobao.com has also confirmed to the police that it was able to uncover such "search cheating" and doesn't count page visits to determine the order in which products appeared in search results.
The gang spent most of the profits from the scam on properties, stocks or transferred the money to other people's accounts, police said.
Wei Jian, head of the Shanghai police's Telecommunications and Online Fraud Squad, said yesterday the police are developing an app to help people report such telecom and online scams as well as inform the public of scams more efficiently.
From March 2016 to the end of March this year, Shanghai police said they cracked over 4,800 cases of telecom and online fraud, arrested over 1,900 suspects and froze 148 million yuan being transferred to the scammers.