JD finds itself in the midst of P2P financing fraud

E-commerce platform JD.com is facing scrutiny after suspected large-scale fraud has been uncovered involving Feixun (斐讯), a brand sold on JD’s platform. On June 10, a crowd of people that bought Feixun’s products gathered in front of the company’s headquarters in Beijing to protest the platform’s practice saying that they were “victims of P2P finance,” iFeng reports.

Shanghai Feixun Data Communication Technology produces TV boxes, smart bands, weight scales and other consumer electronics but its most popular product are routers. The company launched its “RMB 0” promotion in 2016: customers who purchased a Feixun product could receive a full refund by downloading financial app Lianbi Finance created by Shanghai Lianbi (联璧) Electronic Technology. Customers, however, were required to register their full name and bank account. On top of that, customers had to wait 1-12 months for a full refund. In the meantime, they also received offers for financial products such as loans.

In short, Feixun’s “RMB 0” deal was a gateway to selling P2P financial products. App users were offered to invest in financial products in order to get their refund faster or to buy other Feixun products using the same “RMB 0” deal. According to a Xinhua report, by June 30th, the platform registered 3973 investors with a total amount of capital reaching RMB 844 million.

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