Just days after Chinese Internet travel website Ctrip.com (CTRP) proudly released its corporate social responsibility report for 2008, and days before the frenetic week-long Chinese Lunar New Year travel season begins, a Chinese consumer has made a big splash in local media with his complaint that Ctrip.com is selling dubious air insurance policies online.
The consumer, surnamed Liang, wants Ctrip.com to make a public apology to him or pay him CNY800,000 in compensation for its selling of a reportedly dubious insurance policy. The amount of compensation that Liang claims is reported to be the premium of the two combined insurance policies he bought from Ctrip.com.
According to Chinese media, on November 14, 2008, Liang purchased two air tickets from Ctrip.com for a flight scheduled to fly on November 18 from Sanya to Liang's hometown Kunming. Along with the air tickets, he also purchased two sets of accident insurance at the total value of CNY40. However, when he saw the air ticket and insurance policies delivered by Ctrip.com, Liang noticed that the validity term for the insurance policy ended on November 18. That meant that he could not benefit from the insurance if there were an accident between 0:00 and 0:55 the next day when we has supposed to land, for the validity of the insurance policies was supposed to expire at midnight, while he was still in the air.
Liang reportedly called Ctrip and was told by the travel website's client service staff that the insurance would be valid for his entire journey and he didn't have to worry about the time gap so seriously. However, when Liang called Ping An Insurance Company, which was supposed to be the provider of the insurance policies, he was told that the insurance was not effective for the period between 0:00 and 0:55. What was even more astonishing to him was that Ping An said the series number of the two insurance policies was not in their computer system, which might mean that the insurance that Ctrip.com provided to him was fake.
Realizing the seriousness of the problem, Liang once again called Ctrip.com, and the latter said the insurance policies were 100% authentic and promised to issue him a certificate the next day. To Liang's surprise, Ctrip.com did not issue him any certificate. Instead, it offered him two boxes of a Hainan province local specialty saying that they were sorry for causing problems for Liang. But Liang refused to take Ctrip.com's offer. Later, Ctrip.com offered many other options including giving him 1000 loyalty marketing membership points and two free air tickets in the hope Liang would believe that the insurance policies were real. But all these were turned down by Liang, according to local media reports.
Ping An reportedly said in its written reply to Liang saying that the insurance policies from Ctrip.com had no selling region limit, no verification code, and had wrong validity terms. What's more, the series number on the two policies did not conform with the company's rule. Though it did not directly tell him that the two insurance policies were fake, Liang figured out that the reply actually meant that the two policies were fake.
Local media reports that a fake CNY20 policy is usually sold at CNY3-5, while the authentic one goes for CNY15-18. This means that insurance agents will get more than 400% profit by selling fake insurance policies, while only receiving about 10% of profit in selling the real one.
Selling fake insurance policy is a crime in China. China's Criminal Law prescribes that any individual involved in fraud of more than CNY2000 can receive up to life imprisonment as punishment. Ctrip.com has not yet made any official announcement about how it is handling this situation.
Earlier this month, Ctrip.com published its 2008 Ctrip.com Corporate Citizenship Report. Min Fan, CEO of Ctrip.com, told local media that it has been the company's goal to become an excellent corporate citizen and the company will invest more on the construction of corporate citizenship to push its social development in the future.