Expats must take extra precautions in order to avoid frauds and schemes from con artists, aimed at cheating them out of their money

By Yang Xi Source:Global Times Published: 2016/9/7 20:13:39

Lawyers say expats should know their Chinese bank's regulations and characteristics well in case of fraud. Photo: IC

It was a narrow escape for Austin Guidry, who can speak fluent Chinese, from a telecom fraud. He received a call from a Chinese number, informing him that a package arrived and they needed his personal information for confirmation.

"I asked them where the package had been delivered, but they wanted to know my full name, address and ID number before telling me where the package was. I talked to them for a second but then I realized that I had not ordered anything. I hung up the phone immediately," said Guidry, a 27-year-old American who has been living in China for five years and works in Chengdu-based Sichuan University as an oral English teacher.

Harassed by endless fraudulent calls and texts over the past five years, Guidry is very cautious about not leaking his personal information, and his concerns are well founded.

The number of telecom fraud cases in China is increasing. Based on data from the Ministry of Public Security, the number of telecom fraud cases has increased by 70 percent per year from 2011 to 2013. In 2014, there were over 400,000 telecom fraud incidents that occurred in China, according to a September 4 Caijing Magazine report.

Xu Yuyu, a high school graduate from Linyi, Shandong Province, died of "cardiac and respiratory arrest" on August 21, after a con artist defrauded her of 9,900 yuan. Xu had been admitted to the Nanjing University of Posts and Telecom, and she was called by the scammer who asked her to transfer the money she had for tuition through an ATM to a third party in order to get a (non-existent) scholarship. Xu was not alone. Two days later, Song Zhenning, a 21-year-old university student who was swindled out of 2,000 yuan, died of a heart attack after he transferred parts of his tuition through an ATM, according to a Global Times report on August 30.

Con artists do not only target young students. Recently, a teacher from Tsinghua University was scammed out of 17,600,000 yuan by a group of telecom swindlers posing as officials from law enforcement and judicial departments. Beijing police have begun investigating the telecom fraud, according to an August 31 Global Times report.

Expats and locals alike are affected by the rising amount of telecom fraud. And with the use of cell phone and online payments sky rocketing, they have more chances to be frauded than ever. Experts and veteran expats interviewed by Metropolitan share how to spot fraud and how to deal with the aftermath.

It is hard for expats to defend themselves against con artists who are constantly improving their effectiveness. Photo: IC

Paying for the crime

Hao Yide, a Beijing-based lawyer from Yingke Law Firm, has been dealing with expat telecom fraud since 2012. He concluded that usually, expats get hooked by fraudulent e-mails or shopping online.

Hao recalled a case he handled in January 2016. Mark Smith (pseudonym), a 30-year-old American English teacher who has been working in Beijing over a year, lost 100,000 yuan by clicking a fraudulent e-mail link.

Smith went through his inbox as usual in January and an e-mail attracted his attention. The e-mail, which was written in English, first congratulated him on winning online shopping coupons and then said he can claim the coupons after clicking the link that followed. Without a doubt, Smith clicked it and an irrelevant page showed up. Realizing something went wrong, he closed the page as soon as possible. 

He thought that was the end of the story, however, he did not realize that his entire savings of 100,000 yuan, from his Industrial and Commercial Bank of China debit card which he had opened for use with online banking, disappeared until one month later. Initially, Smith was in denial because he never thought that he would be the one being defrauded by a con artist. Later, he felt sad and mad; since he did not pay close attention to his bank account, he lost all of his savings.

He went to the bank and reported the case to the police. According to his bank account record, money was transferred after he clicked the link on his computer the same day.

Hao said that based on the analysis and deduction by the police and the bank, after Smith clicked the link with the virus, the con artists got his online bank accounts and password.

Hao said con artists exploit the fact that transferring money through online banking only requires passwords and does not require the account holder to come to the counter. They illegally obtained Smith's passwords and then transferred all his money easily. Plus, Smith did not open his bank message notifications, therefore, he didn't find out his money was stolen in time.

Many expats do not open bank notification messages. Hao suggested that they should get in the habit of checking these messages. "Several cases show that due to expats ignoring notification messages, they did not realize until days later that they had lost money, which adds to the difficulty of recovering the stolen funds."

What to do

Hao has handled or consulted over 45 expats involved in telecom fraud cases over the past four years. Based on his experience, telecom fraud could happen anywhere and to anybody.

According to a September 1 Beijing Youth Daily report, because police are usually involved after the crime has happened, it is hard for police to detect all telecom fraud cases and get the stolen money back. Telecom fraud has many obstructions; many con artists hide outside of China and it is hard for police to retrieve stolen money.

Getting money back for defrauded expats is harder and more complicated, according to Hao.

"Most con artists register fake companies, addresses and use false information to contact the victim. When defrauding expats, they give them the falsified information and later disappear to register a new company somewhere else. Because expats are not familiar with China and may not have friends in many cities, it is harder for them to find a person to help check the authenticity of the information or find the con artists," said Hao.

Hao said that expats should become familiar with Chinese banking or law systems that could help them find out when and how they were being defrauded, obtain evidence and report the case to police in time. Hao suggested after finding out you have been a victim of fraud, expats should go to the nearest bank to withdraw a small amount of money, showing that you are not responsible for loosing your money and you are securely holding your bankcard. Then, go and ask a bank employee to freeze your bank account in case you may lose more money. Finally, find a lawyer who can help you translate the case clearly and report it to the police in Chinese as soon as possible.

Hao also noted that language barriers can be an obstacle when expats are a victim of fraud. Therefore, expats should get a person who can help them communicate with police in Chinese.

"Smith met the same situation; due to his language barrier, he was not able to detect the lost money sooner. After he found out, he reported the case to the police. However, because his Chinese was poor and the police could not understand English, he could not explain the case clearly. He later asked me to explain the case to the police," Hao said.


Guidry is bothered by Chinese fraud calls and texts several times a week and is familiar with a con artist's way of conducting their crimes.

"The content of fraud calls and texts are the same. Usually they say you have 'won a prize', 'received your package' or 'take the survey and you will win money.' And all they want is your personal information."

Guidry said the number of fraudulent texts he receives is increasing. "In the past, I received one or two texts a week, but now, I receive three or four texts per week," he said.

He used to remove those numbers to his blacklist, however, when he still received tons of fraud texts and calls from new and different telephone numbers, he gave up.

"It is like I am fighting a losing battle. Now I just ignore them and move on with my life. I noticed that most fraud calls are from Guangdong and Fujian provinces. Whenever I see a number from that area, I will not answer the call," he said.

Xiang Ligang, a Beijing-based independent telecom expert, said that most fraud calls or texts Guidry received are from a pseudo base-station, which is a telecom operator used to send mass messages or calls in order to steal money.

Xiang suggested that expats should not answer their phones if the incoming number starts with 170 and 171, which are believed to have been provided by a virtual telecom server. People should also be aware of not clicking any link or replying to any strange message. With things related to transferring money, expats need to think twice before they start moving money around. Also, there are no Chinese government or official organizations that would ask people to process or operate anything on an ATM.

Guidry is also concerned that due to the new pattern of paying bills on the phone and buying things by scanning WeChat's QR code, people are exposing more of their personal information and leaving loopholes that a con artist can use.

In Guidry's mind, expats who live abroad, no matter where they live, should always be more cautious. No matter how familiar they are with how things are done, there are still gray areas.

"Huge culture differences and language gaps make things complicated when an expat finds themselves in trouble. Therefore, we need to be more cautious," he said.

Newspaper headline: Smoke & mirrors

Posted in: Metro Beijing

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