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Actions Against Parasitic Behavior
Rampant telecom fraud triggers intensified crackdown
By Yin Pumin  ·  2016-09-20  ·   Source: | NO. 38 SEPTEMBER 22, 2016

An officer with the Beijing Municipal Bureau of Public Security advises a local resident on how to prevent telecom fraud on April 28 (XINHUA)

Upon hearing that a young woman from east China's Shandong Province had died of a heart attack after being swindled by a telecom fraudster, Zhao Xiaocong, a freelancer living in Beijing, felt his temper rising.

Zhao has also been a victim of telecom fraud. Last year, he received a phone call claiming that one of his friends had been injured in a traffic accident in north China's Hebei Province and had been sent to a nearby hospital. The fraudster, who gave Zhao his friend's name and other credible information, asked Zhao to send 3,000 yuan ($449) to pay for his friend's emergency medical treatment.

Without hesitation, Zhao remitted the money, but when he phoned his friend the next day, he found out he had been defrauded.

"In fact, I frequently receive calls and text messages from strangers promoting their products. Normally, I choose to ignore them, but that time, I was taken in by the information that my best friend had been injured. I hate those fraudsters using my sympathy and stealing our private information," Zhao told Beijing Review.

Like Zhao, many people have been annoyed or deceived by phone scams in recent years, and some have even lost their lives. On August 19, Xu Yuyu, a middle school graduate in Shandong who had just been admitted to Nanjing University of Posts and Telecommunications in neighboring Jiangsu Province, received a phone call asking her to send some money in order to activate a 2,600-yuan ($389) scholarship.

As she had received an official call from the local education authority the day before, she did not hesitate to transfer 9,900 yuan ($1,482), the money that her family had prepared for her tuition in the university, to the bank account that the fraudster provided. When she realized the deception, she was devastated.

The case attracted extensive public attention following media reports that 18-year-old Xu died from a sudden heart attack two days later. Although the six suspects in the case were detained within days, the debate on rampant telecom fraud goes on.

According to a report by Qilu Evening News, based in Shandong's capital, Jinan, another student from the province, Song Zhenning, also died of a sudden cardiac arrest on August 23 after falling victim to a separate telecom fraud, while Li Xiaqin, a second-year university student in the same province, was scammed out of 6,800 yuan ($1,018) on the same day Xu was targeted.

A rampant problem

While the rapid progress of technology in recent years has brought great convenience to people, it has also exposed them to new criminal deception methods. Fraudsters typically contact people by phone or text message and ask them to transfer money on some pretext, such as having won a prize or money having been stolen from their credit card, or police having detained a relative or friend who is suspected of involvement in criminal activity.

"The fraudsters usually target high school graduates and college students, promising them grants or reimbursements and sometimes claiming that their friends need money," Li Yinong, Deputy Director of Investigation at Shandong Police College, told Qilu Evening News.

In Xu's case, they promised a scholarship and obviously had obtained her personal information beforehand, including her telephone number and knowledge about her university prospects.

"All telecom frauds begin with obtaining personal information," Li Tiejun, a security expert with Cheetah Mobile Inc., China's second-largest mobile Internet security company, told Beijing-based China Business Journal.

"Due to the poor information protection system, personal information theft and trade are a common phenomenon in China. Fraudsters can easily obtain private information from the underground market," said Li Tiejun.

"On the one hand, private information can be stolen by hackers using loopholes in information security systems. On the other hand, some people who have access to such information sell it for profit," Li Tiejun said, adding that an industrial chain may exist to satisfy fraudsters' demand for information.

In an online survey by the Internet Society of China in June, 54 percent of respondents said they believed online leaking of private information to be out of control, and 84 percent said they had experienced the leaking of their personal information.

According to figures from the Ministry of Public Security (MPS), the number of recorded telecom scam cases in China reached 600,000 in 2015, having increased by 70 percent annually since 2011.

"The number of similar cases has continued to rise since the beginning of this year," said Chen Shiqu, a deputy inspector with the ministry's Criminal Investigation Bureau.

In May this year, Fan Yingui, a teacher in northwest China's Gansu Province, hanged himself after a fraudster scammed him out of 230,000 yuan ($34,430).

On August 29, a professor at Tsinghua University in Beijing was reported to have lost 17.6 million yuan ($2.67 million) to a phone fraudster posing as a judicial officer.

Of the cases reported last year, however, less than 5 percent have been solved, the MPS figures show.

Li Tiejun, the security expert, said fraudsters are often untraceable because they usually use phone numbers that do not require registrants' real personal information.

In Xu's case, the fraudster called from such a number, which was provided by a virtual telecom server, according to Qilu Evening News.

"It's urgent for China's virtual network operators to improve their management to prevent fraudsters from taking advantage of the loopholes," Li Tiejun said, adding that police and operators should cooperate better to curb telecom fraud.

Meanwhile, Liu Junhai, a law professor at Renmin University of China in Beijing, advised in an interview with Xinhua News Agency that public security authorities, organizations holding personal information, such as banks and schools, and telecom operators should cooperate to build an effective nationwide system to combat telecom fraud.

Taking action

In the wake of Xu's case, government departments and academic institutions have started taking steps to prevent telecom fraud.

According to China Youth Daily, Tsinghua University has begun setting its first-year students a test on safety and security which includes 600 questions about telecom fraud, transportation issues and fire prevention.

In Jiangsu Province, all freshmen to universities and colleges now have to pass a similar test, with 60 percent of the content related to telecom fraud, Yangzi Evening News reported.

Meanwhile, the Ministry of Education issued on August 24 a notice via its official Sina Weibo account reminding students about fraud. The notice said that no organization or person funding students asks students to make any transactions. Students were advised to first confirm any payments with teachers and the local education authority.

On August 26, the MPS published a notice asking the public to be cautious about accepting incoming calls from numbers starting with 170 and 171, which are commonly used by telecom fraudsters.

On September 1, the State Council, China's cabinet, approved an amendment to the Regulation on Control of Wireless Equipment and Satellite Networks, raising the maximum penalty for the use of fake telecoms network transmission stations to 500,000 yuan ($74,850) from the previous 5,000 yuan ($748.5).

Typically, fraudsters use information technology to operate as mobile base stations and send messages via stolen mobile numbers. Such actions will constitute an illegal use of wireless equipment from now on, the amendment stated.

In fact, the authorities had already started paying attention to the problem prior to Xu's case.

In 2013, the Central Government initiated a real-name registration rule for all phone numbers. And, to intensify the effort, the Ministry of Industry and Information Technology released a stricter rule in May this year, which aims at having 95 percent and 100 percent of all mobile phone users in China registered with a real name by December 31, 2016, and July 30, 2017, respectively.

In November last year, the ninth amendment to China's Criminal Law stipulated the leaking of others' personal information as a crime and stated that perpetrators should be punished.

Also last year, a law related to advising the public about potential fraud was drafted, though it has yet to be approved by lawmakers.

In an interview with Xinhua, Zhao Zhiguo, Director of the Internet Security Bureau under the Ministry of Industry and Information Technology, said that the law might finally be implemented later this year.

"Hackers and viruses threaten our data security from time to time, and data abuse and leaks are another serious problem," said Zhao Zhiguo. "We are trying our best to implement an Internet security law as soon as possible, and we are also pushing for relevant changes to the Telecommunications Law."

Copyedited by Chris Surtees

Comments to yinpumin@bjreview.com

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