(Update 13th December)
Further to the information below, which you should read, because it took me ages, there is also a supplemental post here that relates to dealing with websites in China. The full list of websites we think are dodgy can be seen here.
(End of update)
Over the last three months I've spent a good amount of time on the web focusing on Chinese scams. In that time I've learned a great deal myself, and I think it's appropriate that I now convey what I've learned in a manner useful to you. It's my hope, that you can learn from this as well, and spread an awareness and knowledge that can improve your decision making processes with online dealings. It's difficult writing for an audience you don't know much about. So I'm going to make some assumptions, and if anyone has anything to add, or feels I was too light or heavy on certain things, please let me know and I'll keep this posting updated. Special thanks to Rob for his assistance as well.
First, something I think is important for all of us to recognise, is we need to improve our decision making processes when dealing with companies online. I considered myself reasonably internet savvy three months ago, and in the time since, I've seen things that have left me shaking my head. There are very intelligent people working to deceive you. There are highly organised schemes, whose intent is to trick or mislead you. You should never assume for a moment that the internet is a safe place where no-one is ripped off. Internet crime and fraud is a multi billion dollar industry.
Second, I should point out I refer to the Chinese often, despite some of these websites not being in China at all. It's more of a colloquialism that I've developed when talking around the office. A vast majority of these websites are in China however, and I'm too lazy to change my slang.
Third, these tips and techniques are by no means only applicable to this particular kind of fraud. Perhaps it's just my curious nature, but I use these same techniques on many different kinds of websites. Even if I know that the website is 100% legitimate, I often do the same, or at least some of these steps. It's part of the learning process....practice, practice, practice. Over time you'll develop a sense of what looks good or not, and you'll also learn to spot trends and techniques that are used by differing websites.
Fourth, because of the nature of these websites it can be safe to make comparisons. What does that mean? Well, (it's my understanding) a great number of these websites are actually purchased from parent companies. Apparently a template website can be purchased for around $600, and the purchaser (who could be anybody) in turn handles the process of taking the orders, and when you buy from these sites, they place the order with the parent company, then...in theory....send you the goods.
Now this brings up a whole lot of interesting complications, as it's clear that these parent companies couldn't care less what manner their goods are distributed. So the people who buy these websites have been found to spam heavily, to lie about the nature and quality of the goods, or in the worst cases, to not order anything at all and leave people out of pocket with no recourse for getting their money back. All of this is completely unacceptable, but thankfully the amateurism involved makes it that much easier to identify these websites. This also explains why we see sites that are virtually identical in appearance, but have different contact information, bank accounts etc..
Lastly. This posting is not designed to help you identify the difference between those who would send counterfeit items, and those who would just take the money. Don't bother even asking such a question, as it's a waste of my time. Look at the website name
There's millions of websites out there, and as a result it stands to reason that people can't quite get the website name they might want. It's also understandable that those who are not particularly fluent in English may purchase a website name that they've translated from a term or phrase that makes more sense in their own language, but gets lost in translation.
It may be that the person buying the website doesn't even bother trying to make a name that makes sense.
Or it may be that people purchase names that mislead people into thinking that they are somehow official, or they choose a name similar to an existing legitimate company in an attempt to deceive.
There can often not be a great deal of information within the website name, so this isn't a smoking gun, but it's always something to consider. What is the website name, how does it lend itself towards the company. What does it mean.
A Whois search allows you to view information relating to the owner of a domain name. There are plenty of tools available that allow you to do this, and obviously I use SiteHound.
I'll also refer to the website http://www.domaintools.com which has a simple and free web based search option. If you visit http://www.domaintools.com you will see a field age labelled "WhoIs Lookup". Simply enter the website name you wish to search and click on the "Search" button.
So if we look at some examples. I'll start with a search for firetrust.com http://whois.domaintools.com/firetrust.com What you want to look at is the Registrant, as that is the person or company that the website is registered to. Here we see it's
PO Box 4620
Easy enough, if we also look at the Administrative Contact we see further contact details.
PO Box 4620
Christchurch, n/a n/a
One of the really useful pieces of information is the dates. Look at the dates the website was first registered, and when it expires. For sitehound.com we see this
Domain Name: FIRETRUST.COM
Created on: 01-Jul-02
Expires on: 01-Jul-08
Last Updated on: 16-Oct-07
What you want to look for is consistency, you want to look at the owners registered details and dates involved and see if they compare well to actual information presented on the website.
Here is the information as displayed in SiteHound.
Let's compare that information, to information for a potentially dodgy site. So we'll now look at elecsalon.com
Registrant details are suspicious, as the address is lacking. I have no idea how many people in Beijing, but one would think you'd need more than a name and a postcode.
Administrative contact details raise some more flags, take a look at the phone/fax numbers that were provided.
beijing Beijing 100021
tel: 86 010 12345678
fax: 010 12345678
Now let's look at the dates
Registration Date: 2007-08-31
Update Date: 2007-08-31
Expiration Date: 2008-08-31
Again, the same information as displayed in SiteHound
So this website (at the time of writing this) is only 39 days old. Now this might be fair enough, new companies pop up all the time.
Compare this to the website
Consider now though comparing what information you have so far to actual content on the website. We'll continue to look at elecsalon.com
A quick browse to this page, and we check out their contact information None of this matches the information we have, names, email addresses, phone numbers are all different than provided in the WhoIs results.
OK, what about these dates. Well, let's check out their About page There's one sentence in particular to look at "Now we have thousands of long term partners all over the world."
But the website is only 39 days old ? Thousands of long term partners ?
Now glance down to the bottom of the webpage, and you'll see this "Trade Online copyright@2006"
Quality of the website
Overall this website is lacking, certainly I would expect a far greater quality website from such a large and successful wholesaler. But start clicking on some links and we notice some oddities. On the left of the page, click on the PayPal image and you get taken to their Payments page
Notice anything ?
There's no mention of PayPal, they also have a Visa icon on the left, but there's no proper use of Credit Cards for payment. They have an icon for a Credit Card, and they detail a bank account, but this is not a proper Credit Card transaction. If you made a payment from your Credit Card, into a bank account, your bank would clear those funds immediately for payment and you cannot get a refund or reverse credit card charges in this situation. Short version. None of these payment methods provide any kind of proper protection.
You may also see 'westernized' names, that are made up to make you feel more at ease.
Grammar and spelling quality
Back on the About page for elecsalon.com
"We are dedicated to offering the best prices to the small orders, which traditionally can only be enjoyed by volumn order. All the possible ways of reducing the cost of order now is yours if you kindly choose us, since we do them for you. You may easily find out that, our prices are very surprising!"
Me speaky no English....you number one customer....you buy! you buy!.....I better stop there before I offend someone's sensitivities. If you aren't a great speller yourself, your computer has a spell checker, copy the text from the website, inject it into whatever program you have that can perform a spelling and grammar check, and see what comes back.
Web searches are your friend
I often search for the website name, so from your preferred search engine, go and type in elecsalon.com Here is Google results which gives us almost nothing to work with.
The point here is that no historical evidence, no user discussion, should really give cause for concern. It may be too you find other people asking about websites, or discussing bad experiences they had. Don't think that no news is good news however. Reliable and honest internet companies will always reveal positive search results.
When searching you can also add words like "scam" or "fraud" to help refine your search.
Search for uniquely identifiable information
Another great way to investigate a website, is to take what should be unique information from that website and search on it. You would think, that the About page would contain unique information about the company, as every company is different.
So from the About page, we'll take text and search on that. Here's the text I'll use in my search.
"is a wholesale group offering laptops, Digital cameras, videos, GPS, cellphone, mp4, game console and other electron products"
Here's the Google search results (link removed)
Now, it's important to note when searching, that you should try placing the text within " " marks first, as that tells the search engine to only search for that exact phrase and not give you a lot of unrelated results.
We notice a couple of important things here, the first, is that elecsalon.com is missing from the search results, but more importantly, you get 6 other different websites that use that exact same text. 3 of these websites also appear to have been shutdown, or are no longer operation. If you were to repeat the above steps on these other websites, you'd realise there is a real pattern of deceit involved here.
Use of free services
Reliable and honest internet companies should not use free services for email. Hotmail, MSN, Yahoo, Gmail, should all be warning signs if they use that for their points of contact.
If the website doesn't offer secure forms of payment, or forms of payment that offer the buyer protection you should consider that a major warning sign. There are no excuses.
Do not pay by Money Order unless it's to a friend or someone you know you can trust. Money Orders are extremely common for fraudulent activity. Do not pay by Bank Transfer unless it's to a friend or someone you know you can trust. Once the money has cleared your account it's gone, and you have little or no recourse to get it back.
Do not pay by Credit Card if you are paying into someone's bank account or purchasing a Money Order. Credit Cards are great for online transactions, but if you use the card to deposit into someone's bank account or fund a Money Order then it's treated as a Cash Advance from your Credit Card, which means that the funds sent to the account are sent as cleared funds which are unable to be stopped, as a result you are not protected.
Escrow is a common method of handling transactions, but you should always choose your own Escrow service, and not one that is recommended by the seller.
www.escrow.com is one of the more popular reliable Escrow services.
Western Union is being used because it's totally anonymous and there's no way to recover the losses. Western Union itself has a warning/tip on their website that their service should only be used to send money to someone you know.
Taken from Western Union website
Sending money to someone you don't know? You could be at risk for consumer fraud.
The Western Union Money Transfer service is a great way to send money to people you know and trust. If you need to send money to someone you don't know well, you may be putting yourself at risk for fraud.
Because we care about consumers, Western Union urges you to protect yourself from fraud by considering the following:
• Never send money to a stranger using a money transfer service.
• Beware of deals or opportunities that seem too good to be true.
• Don't use money transfer services to pay for things like online auction purchases.
• Never send money to pay for taxes or fees on foreign lottery winnings.
Do not rely on third parties
Business to Business services such as Alibaba, TradeKey, and DHGate are common hunting grounds for the scammers. Many sellers (including the fraudsters) have a "Gold Supplier" Seal or something similar that is being obtained by the trading site. These "shiny" seals are more or less worthless though and prove nothing.
Consider what it is you are purchasing
There's simply no such thing as buying branded goods directly from the manufacturer in China. The companies who produce the product are bound by agreements with the brand owner and are not allowed to sell the products to just anybody. The brand owners, such as Sony, Nike etc...in turn have their own authorised distribution networks. If you are looking for branded product you should research and make an attempt to contact the brand itself and find out who are authorised partners. Some brands even detail this information on their websites.
Using Common Sense
I cannot stress this enough, if it's too good to be true, then it probably is. This sentence holds true in so many aspects of our lives, yet often when we sense a good deal or a chance to make a few bucks, we get greedy and we leave common sense at the door. It's useful to talk to friends, family or other peers as well, as they can often provide a reasonable balance. If they themselves aren't going to be benefiting from the experience whether it be an investment, online purchase...etc, you'll find that their judgement can be more objective than your own.
There is no one thing that's going to answer all your questions. But with a little bit of investigation, with some proper consideration, and with some common sense, you should hopefully be better equipped to make the right decisions. You should always look at the smaller clues to paint the bigger picture, and not let your own greed cloud your judgement.
If in doubt, be cautious and don't let yourself become just another victim.