Scam involving MCN agencies soliciting prepaid advertising fees under the guise of AI-driven traffic guarantees

Who Gets Targeted

The victims are primarily small and medium-sized e-commerce merchants, marketing managers of emerging consumer brands, cultural tourism operators, and individual cross-border e-commerce sellers. These groups generally lack technical knowledge of AI traffic generation, are eager to quickly acquire traffic to boost sales, and have limited ability to verify the authenticity of traffic data. They often fall for promises of 'zero-risk, high-return' and 'guaranteed sales.' Some merchants even take out loans to pay the upfront fees, ultimately losing their initial investment and missing the critical window for product promotion.

骗局怎么运作

• Agencies use short-video platforms, industry summits, and private social groups to advertise 'exclusive AI traffic algorithms,' 'guaranteed GMV,' and 'full refunds if targets are not met.' They target merchants with online customer acquisition needs, often using forged success stories and fabricated backend data screenshots to build credibility, sometimes even promising live demonstrations of traffic allocation logic.
• Merchants are induced to sign service contracts requiring a lump-sum prepayment of advertising fees ranging from tens of thousands to hundreds of thousands of yuan. Contracts intentionally use vague language regarding traffic sources and performance metrics, promising only 'AI precision targeting' and 'guaranteed sales' without specifying channels or user profiling rules, while including heavy penalty clauses to deter merchants from seeking legal recourse.
• After receiving the prepayment, the agency spends only a fraction on actual advertising, diverting the rest to operational costs or employee commissions. Simultaneously, they hire 'click farms' to generate fake traffic, orders, likes, and saves to create an illusion of 'high exposure and high conversion' on the backend, sometimes even presenting forged third-party monitoring reports.
• When merchants notice low conversion rates and request refunds, agencies stall by claiming 'the AI algorithm needs an iteration cycle,' 'traffic support has a lag,' or 'the merchant's product does not meet user needs.' They may provide a token amount of real traffic to stall for time while pressuring the merchant to pay for 'upgraded packages,' threatening to withhold funds based on alleged contract breaches.
• If merchants persist in seeking justice, agencies use the vague contract terms and forged data as evidence to delay proceedings, sometimes resorting to threats of exposing negative information or harassing the merchant's customers. Most merchants give up due to high legal costs and lack of evidence. Some agencies dissolve the company after harvesting a batch of victims, only to rebrand and repeat the scam.

红旗信号（看到这些快跑）

• 🚩 Promises of absolute results such as 'AI precision traffic,' 'guaranteed ROI,' 'full refund if targets are missed,' or 'zero-risk passive income.' Legitimate traffic services cannot guarantee sales, as performance is influenced by product quality, market competition, and other external factors.
• 🚩 Demands for high upfront payments covering more than 3 months. Legitimate MCNs typically operate on a performance-based or monthly settlement model, with prepayments rarely exceeding 30% of the service cycle.
• 🚩 Inability to provide clear details on traffic channels, user profile tags, or real-time third-party monitoring data. Backend data is kept strictly internal and is not open for external verification.
• 🚩 Vague contract terms regarding performance metrics, refund conditions, and breach of contract. Contracts often shift liability onto the merchant while exempting the agency, sometimes including 'data is subject to agency backend records' as a predatory clause.
• 🚩 Requests to transfer advertising fees to personal accounts or non-corporate accounts, inability to provide formal VAT invoices, and refusal to cooperate with regulatory audits.

真实案例

• In March 2026, a manager of a new consumer tea brand in Zhejiang complained to market regulators that an MCN agency charged 120,000 yuan for a 3-month contract promising 'AI-driven monthly sales of 100,000 cups.' The agency spent less than 20,000 yuan on fake traffic, resulting in only 147 actual sales. The merchant's refund request was denied; after mediation, 70,000 yuan was returned, but the remainder was lost due to insufficient evidence. The MCN has been listed as an abnormal business entity.
• In May 2026, a cultural tourism operator in Jiangsu reported to the police that an MCN agency promised 50,000 visitors via AI algorithms for a 280,000 yuan fee. The 'exposure' and 'booking' data provided were entirely fabricated, and actual visitor numbers increased by fewer than 300. Police investigation revealed 12 victimized merchants with losses exceeding 2 million yuan; 3 executives were placed under criminal coercive measures.
• In July 2026, a cross-border e-commerce seller in Shenzhen reported an MCN agency that promised 'AI-driven annual sales of 10 million' for a 350,000 yuan annual fee. The backend data provided was falsified, and the store averaged fewer than 20 orders per month. Investigation showed the agency had defrauded 17 cross-border merchants of over 8 million yuan. The case is currently under investigation.

Official Stance

• On April 12, 2026, the State Administration for Market Regulation issued a 'Warning on Regulating the Marketing and Promotional Activities of MCN Agencies,' explicitly stating that MCNs must not use 'AI' or 'Big Data' for false advertising, nor promise unattainable results like guaranteed sales or returns. Local regulators were ordered to investigate related illegal activities.
• On June 8, 2026, the Cyber Security Bureau of the Ministry of Public Security issued a warning regarding the rise of scams where MCN agencies use 'AI precision traffic' to defraud merchants of prepaid fees, with losses ranging from tens of thousands to millions. Merchants were advised to be cautious and avoid large upfront payments.
• On August 17, 2026, the Beijing Municipal Radio and Television Bureau issued a 'Notice on Regulating Livestreaming and MCN Sales Activities,' requiring MCNs to disclose traffic data and sources truthfully. It prohibited the fabrication of traffic or transaction data and mandated penalties such as suspension of qualifications or blacklisting for non-compliant agencies.

How to Protect Yourself

• ✅ When selecting a traffic service, demand publicly verifiable past success stories. Verify the authenticity of these cases by contacting the merchants involved. Do not rely solely on verbal promises or unverified screenshots.
• ✅ Ensure contracts explicitly define traffic channels, user profile tags, performance metrics, and data monitoring methods. Refund conditions and breach of contract responsibilities must be clear. Insist that guaranteed performance promises be written into the contract and keep all communication records and promotional materials as evidence.
• ✅ When making payments, use corporate bank transfers and demand formal VAT invoices. Avoid paying large sums to personal or third-party accounts. Keep prepayments below 30% of the service cycle and avoid paying for a full year upfront.
• ✅ If traffic data appears abnormal or results fall short of promises, verify the data through the contractually agreed monitoring channels immediately. Collect evidence and report to market regulators or the police, or seek resolution through consumer arbitration or litigation to avoid missing the window for evidence submission.