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January 14, 2011

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Wanted iPhone ... got raincoat

ONLINE bargain hunters who hoped to land a cut-price iPhone ended up with playing cards, used cosmetics and even raincoats, after being caught in an Internet scam.

Some 46 victims of this "group purchasing" sting have come forward and are calling for others who were duped to join them.

Many of the group, thought to number more than 500, may be reluctant to reveal themselves as they are embarrassed at being taken in and fear they will become a laughing stock.

Group purchasing involves shoppers banding together online and placing a bulk order for a popular product. They can negotiate wholesale rates, paying between 20 and 50 percent less than high street prices. The person who sets up a group purchasing website takes commission on clients' payments.

But on this occasion the group, who believed they would get an iPhone for 3,300 yuan (US$499) - they usually retail for around 6,000 yuan - ended up with what the crooked organizer mockingly called "little presents."

Now, led by a local resident surnamed Zhang, the victims have formed a consumer rights group and have been trying for the past three months to get their money back.

Zhang said the day after they reported the case to police, the group purchasing company's website disappeared.

Officers said they were unable to track the suspects because the server of the website is located in the United States.

And as only a small number of victims had come forward, police decided not to conduct further investigations.

However, this is not an isolated case. In Shanghai alone, 379 residents have complained on the consumers' rights protection website this month. Since October 20 last year, the site has received 1,932 complaints on the subject. Most say they have been cheated by unlicensed group purchasing websites which fail to deliver promised goods.

A Shanghai Daily investigation has found that it is easy for crooks to set up a group purchasing website. Equipped with a domain name, server space and a list of fake information, they can collect clients' cash and "disappear."

Although the country's Administration of Industry and Commerce has announced that it will regulate online shopping methods to protect consumers, a lack of detail in law enforcement has made it difficult to punish companies.

Liu Chunquan, a local lawyer, told Shanghai Daily that victims of group purchasing scams should group together and report cases to the police, instead of keeping silent.


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