The payment account of a major cross-border seller was hacked, involving millions of dollars!

Recently, Tongtuo's parent company Huading Holdings issued an announcement stating that it had received a report from its subsidiary Tongtuo Technology regarding abnormal funds at Walmart stores, and that the incident had already involved civil and criminal lawsuits. In addition, Tongtuo's funds worth tens of millions of yuan had been frozen earlier because its stores were closed, and now the whereabouts of these funds have also been made public ...

Tongtuo Walmart's payment account was suspected to have been changed, alarming the FBI

It seems that something will happen every peak season, and it has become an unwritten rule. Recently, Huading Co., Ltd. issued an announcement, which showed that the relevant collection account of Tongtuo Technology's existing Walmart store Sports Station was suspected to have been changed or transferred by an overseas principal, and it was unable to receive the money normally.

In order to recover the relevant funds, Tongtuo Technology has commissioned a local American lawyer to handle the case and filed a civil lawsuit in the Illinois State Court, requesting that the defendant (overseas client Xie) repay US$2.78 million (equivalent to more than RMB 17 million based on the current exchange rate ). At the same time, it took TRO, PI and other freezing measures against the defendant and demanded compensation for all expenses and losses including attorney fees.

In fact, this case involves not only civil litigation but also criminal litigation. Currently, the FBI has intervened in the investigation of Tongtuo Technology's case. The investigation is still ongoing and no results have been obtained. Regarding the progress of civil litigation, the Illinois State Court has accepted the case but has not yet made a judgment.

This incident still starts with Tongtuo Technology's expansion of sales business. It is reported that Tongtuo Technology registered and handled Walmart store accounts in the United States in order to expand its sales business on the Walmart platform. However, in the subsequent operation process, Tongtuo Technology found that it could not find the payment information of the US company's payment account. After an investigation, it finally learned that the Sports Station related payment account was suspected to have been changed or transferred by the overseas principal Xie Dan, and it was unable to receive the payment normally.

Therefore, Tongtuo Technology filed a lawsuit in the Illinois State Court against the overseas client Xie Dan in its own name and the seven companies it established in Colorado, USA , in order to recover the relevant funds.

For cross-border e-commerce companies, the collection account is like a lifeline that strangles the throat. Its importance is self-evident. If you are not careful, it is very likely that the hard work of the entire company will be destroyed. But now, such a thing has happened to the highly confidential seller account password information, and the exposure of the major lawsuit behind it has also made many sellers feel incredible.

"I thought cross-border sellers had suffered enough this year, but I didn't expect this to happen," one seller said. Nowadays, even large cross-border sellers have risk control loopholes, which has shocked many small and medium-sized sellers, who have called for increased awareness of prevention and strict control of payment accounts.

Here, the editor also reminds the majority of sellers that if their business involves many accounts and platforms, they must check the settings of their payment links in advance and multiple times; regularly modify and save the account password; bind the payment account to the bank account; and for key operations such as payment, withdrawal and change, it is necessary to set up multiple managers to jointly authorize, so as to avoid similar problems as the Tongtuo Technology payment account being hacked.

This year alone, Tongtuo Technology has been plagued by turmoil. In addition to the recent litigation, a large amount of funds were frozen due to the closure of its stores. Some industry insiders were also speculating whether this money could return to Tongtuo Technology. Now the whereabouts of the frozen funds have been made public.

15.69 million yuan of funds were "used", Tongtuo is in constant turmoil

Since May this year, the account suspension earthquake in the cross-border circle has made many cross-border sellers tremble with fear. After all, there are quite a few Chinese sellers who have been blocked, and most sellers are most concerned about the whereabouts of the frozen funds after their accounts are blocked. Many sellers also expressed concerns that Amazon would embezzle the funds.

"Amazon has always treated customers as gods, and will agree to unreasonable refund requests with their eyes closed. Buyers can get things without paying. Think about how much money can be saved for the frozen funds?" a seller said helplessly. Judging from the actual situation of many sellers, only a very small number of sellers have recovered part of the frozen funds, and more sellers are facing the situation of losing both money and goods.

Recently, the incident of Tongtuo Technology's funds being frozen due to the closure of its account has gradually become clear, and there are new developments. According to the announcement of Huading Shares, a total of 41.43 million yuan of funds of Tongtuo Technology were frozen by Amazon due to the closure of its store , and now the whereabouts of this money have become clear.

Data from the announcement of Huading Holdings showed that the restricted funds of Tongtuo Technology were mainly used to pay for Amazon's warehousing and logistics costs, handle early consumer after-sales compensation and return refunds, etc. A total of RMB 15.69 million has been used so far , and the remaining amount of frozen funds is RMB 25.74 million, accounting for 2.65% of the company's cash and cash equivalents at the end of 2020.

For many sellers, it is understandable to use frozen funds for storage fees, logistics, refunds, and consumer returns and refunds, which is also a routine operation of Amazon. However, in reality, more sellers' funds will be withheld in full, which means that you can't get a penny back.

According to Amazon's fund retention policy, if a seller engages in fraudulent activities, abuses the Amazon system, and repeatedly violates the seller and buyer protection policies, all funds in the account will be withheld. To another extent, as long as Amazon determines that you have committed fraud or violated relevant policies, the worst result will occur, which is to withhold all funds.

Regarding the impact of store closures and other events, Tongtuo Technology also stated that Amazon's store closures and fund freezes will have a certain degree of adverse impact on this year's cross-border e-commerce business. This time, Tongtuo Technology has encountered problems with the payment account of Walmart stores, which has further deepened Tongtuo's development difficulties.

In the third quarter report released by Huading Shares, it can be seen that the cross-border e-commerce sector incident has a great impact on it. Relevant data shows that in the third quarter of 2021, Huading Shares achieved revenue of 1.964 billion yuan, a year-on-year decrease of 20.31%, and all this was mainly due to the Amazon incident in the cross-border e-commerce sector and the impact of European VAT taxes.

The first clues about Tongtuo's response to the account suspension can be seen in the announcement of Huading Shares in August. Tongtuo Technology said that it will increase the sales share of other e-commerce platforms such as eBay, Walmart, AliExpress, Lazada, etc., and will increase the investment in Tongtuo Technology's independent website, and will actively expand offline physical store channels in Europe and the United States to reduce the adverse effects of the account suspension.

Tongtuo

Receiving account

Hacked