Criminal groups eye mini programs as fraud potentials and legal actions encounter barriers
Earlier version of the article used “mini program design fraud” in the title. This version has replaced it to avoid ambiguity.
The strong performance and increasing needs of mini programs are breeding fraud. But the country’s legal system is behind the race with misbehaviors taking the ride of China’s booming business digitalization demands.
Deceiving those who wish to launch mini programs but lack technical knowledge, criminal groups are charging tens of thousands of RMB for projects that only costs a few hundred, China’s state media Xinhua says in an investigation report (in Chinese). In the case, mini programs become a tool to lure potential victims into a business fraud.
Victims claim that they were invited to exclusive conferences with WeChat and Alipay’s official trademarks and authorization designed for face-to-face payment. This was easily taken as an official event organized by Tencent or Alibaba. After fake experts gave speeches on program design and announced a few open VIP opportunities, many conference attendees eagerly paid for expensive services.
A victim surnamed Wang rushed to sign up for six projects and paid RMB 78,000 ($11,342) over three installments after he saw people at a conference eagerly signing up.
The six projects Wang signed up for, according to the event organizer’s introduction, can help set up regional business monopolies to secure market share and revenues in diverse segments. According to a phone conversation Wang had with official Alipay staff, accessing a mini program is free, and designing fee for mini programs he signed for is usually around a few hundred each. Additionally, no one can guarantee any monopolies.
Organizers of the events also signed contracts with victims. However, legal terms used in the contracts are vague. The contracts neither include service providers’ real addresses, responsibilities, or other related service information.
Ant Financial receives around 200 monthly calls to confirm events’ and projects’ qualifications, the Alibaba’s finance affiliate says. As top-tier cities are gradually aware of the fraud, criminal groups are moving to less-developed areas. With weak legal evidence, nevertheless, victims in developed areas find it hard to push forward an investigation.
The Chinese IT industry is considering mini programs another blue ocean that could bring huge traffic and new commercial potentials. The valuation of the mini program ecosystem is now around RMB 10 billion. An earlier report from Xinhua says mini program users in China have hit 280 million. Apart from WeChat, China’s leading mini program development platform, Baidu released its own mini programs during Baidu Create 2018, the company’s annual innovation conference. Huawei and Xiaomi also developed similar digital products.