Shang­hai guide­line raises alert over com­plaints by phony fraud-fight­ers

China Daily (Latin America Weekly) - - China - By XING YI in Shang­hai [email protected]­

Seven reg­u­la­tory de­part­ments in Shang­hai have jointly put for­ward a guide­line to pre­vent pur­ported fights against fraud that are them­selves fraud­u­lent.

The de­part­ments said any­one who tries to black­mail mer­chants by pick­ing on mi­nor faults in prod­ucts, or even forg­ing de­fec­tive prod­ucts with in­tent to file fraud com­plaints, will be put onto a black­list or lose credit.

The de­part­ments in­clude mar­ket watch­dogs, such as the Shang­hai in­dus­trial and com­mer­cial au­thor­ity, the food and drug au­thor­ity and law en­force­ment agen­cies, such as po­lice bu­reaus.

Ac­cord­ing to Shang­hai Law Jour­nal, the num­ber of fraud­u­lent com­plaints re­ceived by mar­ket watch­dogs has grown from some 800 in 2014 to more than 60,000 in the first half of this year, ac­count­ing for 30 per­cent of the com­plaints dur­ing the pe­riod.

A ma­jor­ity of such com­plaints come from so-called pro­fes­sional fraud fight­ers, who have taken on fraud fight­ing as a pro­fes­sion to gen­er­ate in­come.

The city’s in­dus­trial and com­mer­cial au­thor­i­ties are draft­ing de­tailed cri­te­ria to judge whether a per­son is fil­ing a le­git­i­mate com­plaint against a faulty prod­uct or sim­ply try­ing to use the com­plaint to black­mail the mer­chant.

The guide­line, which was is­sued in Oc­to­ber, re­quires re­lated par­ties to con­sider the true pur­pose of ev­ery com­plaint, and ques­tions should be asked. For ex­am­ple, is the com­plaint merely aimed at get­ting com­pen­sa­tion, as the cus­tomer knew the prod­uct was de­fec­tive be­fore buy­ing? Were mul­ti­ple cases filed, or did the cus­tomer buy an un­usu­ally large num­ber of prod­ucts, ex­ceed­ing nor­mal con­sump­tion?

Su Min­hua, a lec­turer at Shang­hai Uni­ver­sity of In­ter­na­tional Busi­ness and Eco­nom­ics, said “pro­fes­sional fraud fight­ers” usu­ally do not target prod­ucts with real qual­ity is­sues but prey on those that have mi­nor prob­lems in ad­ver­tis­ing or on la­bels, be­cause fight­ing the for­mer takes much more ef­fort.

Su has been study­ing the phe­nom­e­non and shared her find­ings at a sem­i­nar held by East China Uni­ver­sity of Po­lit­i­cal Sci­ence and Law in Oc­to­ber.

Pro­fes­sional fraud fight­ers are be­com­ing more or­ga­nized and so­phis­ti­cated, and ad­min­is­tra­tive or­gans and courts have be­come their tools to ex­tort money from busi­nesses, she said.

Still, ac­cord­ing to Zhang Shao­qian, a law pro­fes­sor at Shang­hai Jiao Tong Uni­ver­sity, “It’s wor­ri­some to la­bel all pro­fes­sional fraud fight­ers as fraud­sters, and we should take com­pre­hen­sive mea­sures to deal with such peo­ple be­cause there are dif­fer­ent lay­ers in fraud fight­ing.”

Zhang said those who black­mail or spread ru­mors should be sued.

This year, the Shang­hai No 1 In­ter­me­di­ate Peo­ple’s Court is­sued a re­port on con­sumer rights pro­tec­tion dis­putes that said fraud fight­ers have a right to sue com­pa­nies for faulty prod­ucts, but it re­quired a strict check of the ev­i­dence for puni­tive com­pen­sa­tion.

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