The arrested suspects operated by pretending to be legitimate suppliers on Alibaba.com. The arrests were made in the Putian, Chinese in April 2011, but were only disclosed on Wednesday at a news conference held by Alibaba and Hangzhou's public security bureau.
Buyers either did not get the products ordered while payments had been made to sellers or either they recieved totaly different or lower quality product. In past few years since online B2B marketplaces developed rapidly it had become a norm for buyers to get scammed.
As per the statement issued from Alibaba Hanzhou, the suspects used Alibaba.com and others websites to scam customers. Names of other websites has not been issued by Chinese police yet.
Alibaba took action against 36 suspects who were allegedly seen involved in fraud cases that had threatened to damage the reputation of Alibaba.com. In February, company took a bold step and revealed 2,326 suppliers on the alibaba.com website who had been engaged in scams against overseas buyers from 2009 to 2010. The fraud was so extensive that 100 sales people, along with several supervisors and sales managers were found responsible for allowing the crimes to evade detection.Alibaba.com, and its parent company Alibaba Group, have sought to reassure customers of the site's safety. Alibaba.com's CEO and COO both resigned in response to the fraud cases, while employees involved with the fraud were terminated. Alibaba has also paid $1.94 million to compensate buyers who were victims on the fraud.
The 36 suspects, however, were only responsible for part of the fraudulent transactions committed on Alibaba.com, said Chan. The company has been assisting Chinese police to track down other suspects involved with e-commerce scams.
Following the disclosure of the fraud cases, Alibaba.com has taken new measures to prevent scams from taking place. Since February, the number of fraud complaints received monthly by Alibaba.com has declined 70 percent, according to the company.
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