Emails from clients concerning online scams

Last year China Checkup received many emails from clients concerning online scams. In one such case Cheng had placed an order on their online shop sell-buying.com, wired money to their assigned Chinese bank account and received an invoice for their order. But it turned out that the invoice was a fake, sent only to buy time, the supposedly decent dealer stopped taking calls and replying to emails. Finally it became obvious that the company was in fact a fictitious one. Investigation The Company listed on the invoice as the seller, “Shanghai Beiwei Mechanical Electronics Technology Co. Ltd.” was found not to exist, while the name of “China Pacific Insurance (Group) Co. Ltd.”, China’s second largest property insurance company, seemingly was put on the invoice just to make it look more authentic.

Some customers noted that while they were visiting some genuine online shops they were actually redirected to fake and similar websites. Many big online shops like Alibaba.com are suffering huge losses, because of these scams as many customers are falling prey to this kind of trap. There have been around 300000 cases of e-frauds in china totaling, around RMB 42 Million.

a. Analyze the case and suggest how Mr. Cheng could have avoided the online fraud and the losses he suffered?

b. Analyze the various types of e-frauds detailed in the case.