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Scams and swindles

Online and phone scams cost Hongkongers HK$3.3 billion in less than a year

Local authorities warn public to be aware of tricks con artists commonly use to cheat their victims

PUBLISHED : Monday, 09 July, 2018, 8:16pm
UPDATED : Monday, 09 July, 2018, 11:28pm

More than 1,100 Hong Kong residents and companies have been conned out of almost HK$3.3 billion (US$420 million) in online and phone scams in the 11 months since the police’s specialist fraud squad started operating, according to law enforcement sources.

The staggering figures were revealed on Monday as police warned the public to watch out for a combination of old and new tricks used by swindlers.

In one of the latest incidents, a local businesswoman, 50, sought help from police last Friday after she was duped out of HK$10 million in a combined online romance scam and “black money” ruse.

On Monday, officers from the force’s anti-fraud squad helped her freeze about HK$2.3 million in three out of six Hong Kong bank accounts used to collect her money. So far, no one has been arrested.

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The Anti-Deception Coordination Centre started work under the Commercial Crime Bureau on July 20 last year.

There were seven officers when the centre was set up. Manpower has since increased to more than 20 officers, 10 of whom have been temporarily transferred to the centre.

The unit has established direct contact with more than 10 major banks in Hong Kong in an effort to intercept swindled funds.

By mid-June it had received more than 1,100 requests to halt payments from victims of online and phone scams, totalling HK$3.26 billion. The victims included individuals and international corporations. The biggest loser was a Europe-based firm duped into transferring US$7 million into a Hong Kong bank account in a commercial email fraud earlier this year.

The team helped freeze about HK$490 million from almost 270 cases before the money was transferred out of the scammers’ bank accounts, mainly in Hong Kong.

The requests to the centre involved about 570 commercial email fraud cases, 180 social media deception cases, including romance scams, nearly 170 phone scams, and 115 investment fraud cases.

While dealing with more than 21,500 calls to the centre’s 24-hour hotline, the source said the team also prevented 97 callers being duped.

Police said the number of online romance scams had risen sharply this year, but reports of phone scams had decreased. The Post reported last month that 159 people were duped out of HK$98 million in internet love scams in the first four months of this year – an increase of more than 200 per cent on the 50 cases in the same period last year, when scammers bagged HK$21 million.

The worst case was a 56-year-old woman living in public housing who was conned out of HK$26.4 million over 18 months. The money was transferred to more than 10 bank accounts in Hong Kong, Malaysia and other countries, in more than 300 transactions. The victim realised she was being duped in February and contacted the anti-fraud squad, which managed to recover only HK$2 million from local bank accounts.

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A finance manager lost HK$14 million to a con artist who posed as a British film director and contacted her through a dating website in 2010. She had an online relationship with him for eight years but never met him in person. She called police in April after realising she had been swindled.

“Intelligence indicated scammers spent more time studying the backgrounds of their targets through different channels before befriending them, winning their trust and inventing excuses to cheat,” another source said.

This was one of the major factors causing more people to fall victim to romance scams and had resulted in a higher success rate for the culprits, he said.

He also warned the public to watch for a combination of new and old tricks used by scammers after the businesswoman was swindled out of HK$10 million.

She was taken for a ride by a romance scammer pretending to be an American-Chinese soldier stationed in the Middle East who befriended her on Facebook in November last year.

“He borrowed money from her saying he had to pay administration fees to quit the US military,” the source said.

Between January and March, she was duped into transferring HK$1.7 million into six bank accounts in Hong Kong and the mainland.

The victim was then told that the soldier’s friend, a United Nations staff member, had found a lot of American dollars while serving overseas. But because of controls on foreign currency in the war-torn destination, the money was in a “security blackened” state with the banknotes dyed to avoid detection by authorities when it was smuggled out of the country. She was told that a chemical liquid could remove the dye and return the cash to its normal state.

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She arranged to meet the “UN staff member” in a hotel room in Shenzhen on May 3 where she was showed how the dyed money could be turned back into usable US notes.

Between May 9 and June 4, she transferred another HK$8.3 million into bank accounts to buy the chemical. She realised it was a scam and called police last Friday.

The source said the “black money” scam was popular in the city in the 1990s but nowadays only a few such cases were reported each year.

“It’s an old but effective ruse,” he said. “No matter whether they are old or new scams, swindlers always make use of the tricks … until their victims lose all their money or realise it is a scam.”

Later this month, the city’s cybercrime situation is expected to be announced in a press conference with the Hong Kong police force’s director of operations, Tang Ping-keung, and director of crime and security, Li Chi-hang.

According to official statistics, police handled 2,429 reports of deception in the first four months of this year, up 4.7 per cent on the 2,319 cases in the same period last year.