image

City Weekend

Hong Kong’s online shoppers reminded to be vigilant as police admit they cannot help growing numbers of scam victims

The number of reported shopping scams has gone up by more than half in a year, and experts say the crooks are getting more sophisticated. But as e-commerce grows and grows in the city, many buyers don’t know the facts

PUBLISHED : Saturday, 05 August, 2017, 8:17am
UPDATED : Tuesday, 08 August, 2017, 5:05pm

Hongkongers are being reminded to protect themselves from joining a growing group of online shopping scam victims in the city, as police favour targeting lucrative scam syndicates over one-off scammers.

Senior police officers this week insisted they had secured convictions in some of the biggest cases of shop scams, which involve the seller taking an online payment for advertised goods, but never actually sending the product.

But they admitted not keeping records of how many suspects have been arrested or convicted for involvement in online shopping scams specifically, adding that they rarely arrest a scammer unless he or she has several victims.

The police officers’ comments came after it was revealed the number of Hongkongers being snared by such scams jumped by more than half for the first six months of the year, against the same period last year. The number of reported online shopping frauds rose to 872 between January and June this year, up from 559 a year before, marking a 56 per cent increase. Comparing the same periods, the amount of cash lost in scams increased by 54 per cent, to HK$5.7 million. This followed a two-year period from 2014-16 when the number of reported cases was steadily falling.

Phone scammers cheat Hong Kong woman, 23, of parents’ HK$1 million life savings with fake arrest warrant

Police said the new upward trend was driven primarily by the increasing popularity of online shopping in Hong Kong, rather than consumers becoming more gullible, but they said scammers are generally becoming more sophisticated.

Investigators have said victims are often lured in with promises of discounted designer goods, electronics and concert tickets. They have suggested the scamming gangs are Hong Kong-based, often targeting their victims on platforms like Facebook and WeChat, using local knowledge of the consumer market, and communicating in Cantonese. Some scammers set up professional-looking websites to con victims.

Police Superintendent Raymond Lam Cheuk-ho, from the Cyber Security and Technology Crime Bureau, said he hoped consumers would become increasingly vigilant after police publicised the amounts of money lost to online shopping scams.

But he admitted it was difficult for officers to pursue suspects in smaller cases because, particularly in the early stages of an investigation, it may be regarded as a consumer dispute rather than a criminal case.

Taiwanese businessman lured to Hong Kong and cheated out of US$100,000 in fake gold scam

“If people can be more aware of the problems involved, it will be better,” he said. “They may not be aware there are members of crime syndicates who are profiting from this. Possibly, scammers are becoming more sophisticated; they are using various e-commerce platforms and social media and they know how to hide their identity.”

He said that online buyers would be safer using bigger, better-known e-commerce websites, which require sellers to give personal details, making them more traceable.

Despite the lack of police statistics available on arrests or conviction rates for online shopping scams, the force’s figures show the number of arrests for deception offences increased by 5.7 per cent between the first six months of 2016 and the first six months of 2017.

Lam said officers in his unit focus on analysing data to assemble evidence from multiple victims against a particular scammer or scamming gang. He said culprits can face between two and four years in prison for charges including obtaining property by deception; money-laundering and fraud. He said individual victims were only losing relatively small amounts of cash and it was difficult to recover their money.

“Victims often believe their goods will be delivered, but scammers are just buying time and finding ways to move the money into new bank accounts,” he said. “In that time scammers may also change their names on social media. That’s why you should use a registered online shopping platform.”

In April 2014, almost 90 people lost a total of HK$23 million after being conned into buying luxury watches and handbags from the website of a Tsim Sha Tsui-based company. The victims never got what they paid for and some were even conned into handing over more cash for promotional events and gala dinners which never happened. Police arrested a 51-year-old man and a 53-year-old woman on suspicion of conspiracy to defraud, but later released them for lack of evidence.

In August 2015, a fake Tiffany & Co website with the address “hk.tiffanyncoonline.com” was set up in a bid to con Hongkongers into providing their personal information and credit card details. It offered enticing discounts of up to 90 per cent, with necklaces usually worth HK$3,488 supposedly being sold for the tiny sum of HK$298. The site was removed after authorities were alerted, but it remained unclear how many Hongkongers had been duped into providing their details. Hongkongers were subsequently warned to check where exactly merchants are based, as website addresses which include “.hk” may not in fact indicate that a business is Hong Kong-based.

Only last month, police arrested 30 Hongkongers from four gangs in connection with 162 online shopping scam cases involving a total of HK$888,000.

Criminal lawyer Kevin Steel, a partner at Robertsons Solicitors in Hong Kong, said victims of online scams tended to be gullible and greedy. He suggested they were often new investors wanting to make fast money or retired people who had been swayed by professional fraudsters with promises of unrealistic returns of up to four times their initial investment.

“Professional fraudsters are quite sophisticated now,” he said. “Consumer fraud is increasing; but right now, it’s not significant enough for ‘real’ fraudsters to get excited.

“It can be something as simple as changing a letter in an email address that can cheat people out of millions,” he said, referring to emails that look like they come from a reputable company, but are actually from scammers hiding behind email addresses containing names that look a lot like the real company’s.

Shopping online is increasingly popular in Hong Kong, but is still not as prevalent as in other developed economies.

The share of people who said they shopped online in the last 12 months rose from 16 per cent in 2009 to 23 per cent in 2014, according to the latest statistics from the Hong Kong Census and Statistics Department.

That contrasts with an online shopping penetration of 81 per cent in Britain; 78 per cent in the US; 73 per cent in Germany; 69 per cent in Japan and 67 per cent in mainland China, according to a comparative study by the Hong Kong Consumer Council from November 2016.

The report’s authors suggested consumers in these booming markets were simply responding to the increasing prevalence of online deals which offered them discounts on certain products when compared with prices on the high street.

Back then, the council warned that Hong Kong needed greater regulation of its online shopping industry, as it predicted the industry would keep growing. It got 3,300 to 5,600 complaints about online shopping each year between 2013 to 2015.

And Hongkongers lack any legal protection or consumer rights when shopping online.

The council suggests Hong Kong should introduce a cooling-off period which would allow shoppers to withdraw online transactions within a certain period of time.

In its study, the council found about half of Hong Kong’s online shoppers (between 47 per cent and 51 per cent depending on their age) indicated they do not know about consumer protection mechanisms, and said that “shows they have a fairly weak understanding about how they can be protected”.

Meanwhile, only 52 per cent of online shoppers polled said they were aware of the relevant terms and conditions when buying a product.

Professor Wong Kam-fai, chairman of the research and testing committee under the council, has warned online shoppers to consistently check a seller’s background and retail policy before buying.