China Briefing | How rampant phone scams highlight China’s need for tighter privacy laws

China has 1.3 billion mobile phone users and 700 million internet users – 90 per cent of whom use handsets to go online – giving it an enviable distinction as the world’s largest market for the internet, ecommerce and smartphone sectors. This presents enormous potential for Chinese and foreign companies.

But as mainlanders have become hooked to their mobile phones for paying bills, booking tickets, and purchasing goods, they have also become prey to well-trained, sophisticated, and hi-tech criminals operating from home and overseas. This has given China a more dubious distinction – of being the world’s largest market for phone scams and internet frauds.

It has become a daily ritual for mainlanders to receive a barrage of unsolicited calls, some of which are nuisance calls from property agents or telemarketing sales people for financial institutions or even propaganda recordings from Falun Gong, a cult banned on the mainland. But many calls are of a sinister nature, offering unsecured loans or fake invoices as bait. Some callers even impersonate law enforcement officers or government officials.

These criminal enterprises no longer work from decrepit back alley offices but instead have become multi-national joint ventures with headquarters based in Southeast Asia, Australia and even Africa.

Fraudsters from Taiwan are the key culprits as they recruit mainlanders and other Taiwanese and fly them overseas for training, give them scripts outlining their roles and teach them what to say over the phone.