Douyin E-commerce Cracks Down on “Phone Top-Up Fraud,” Removes 25 Violators

CNBC Tech Alert – September 7th – Douyin, the Chinese version of TikTok, is cracking down on fraudulent practices within its e-commerce platform, specifically targeting vendors offering mobile phone recharge services. The platform’s Safety and Trust Center announced that recent investigations revealed a breach where a limited number of recharge vendors, due to lapses in supply chain management, inadvertently exposed user information. This data leak led to consumers receiving deceptive texts and calls from unknown numbers following their phone recharge transactions.

The scammers, posing as representatives of the recharge service, claim the transaction was an “error” and pressure users to refund the alleged overcharge to an unfamiliar phone number – a classic phishing scheme designed to steal funds. This type of fraud not only undermines consumer confidence but also directly threatens the integrity of transactions on the platform.

Douyin claims that this illicit activity substantially jeopardizes the financial well-being of its users and disrupts equitable business practices. In response, the company has initiated a targeted campaign to combat this type of fraud proactively. The proactive move highlights the challenges faced by large e-commerce platforms in managing third-party vendors and safeguarding user data in a rapidly evolving digital landscape.

To date, Douyin has removed 25 non-compliant vendors from its platform. Furthermore, in accordance with established guidelines, Douyin is freezing payments owed to these vendors and blacklisting them, effectively terminating any future business relationships. This decisive action sends a strong signal to other merchants that Douyin is committed to maintaining a safe and trustworthy environment for its users.

This incident underscores the growing sophistication of online fraud and the need for e-commerce platforms to invest in robust security measures and proactive monitoring systems. The focus on supply chain management is particularly relevant, suggesting a vulnerability in how Douyin onboards and vets third-party service providers. Moving forward, enhanced due diligence, stricter data security protocols, and continuous monitoring of vendor activities will be critical to prevent future incidents and maintain user trust. The long-term success of Douyin’s e-commerce arm depends not only on user engagement but also on its ability to create a secure and reliable transactional environment.