Phone scams are big business in Taiwan

March 23, 2009 (Straits Times)

Victims lost $551m last year; survey shows almost one in 10 conned WHEN Taichung city mayor Jason Hu recently called up a lucky draw winner to deliver the good news, the voice on the other end of the line was filled with doubt, not excitement.

Never trust the caller, as conventional wisdom goes in Taiwan, where almost everyone has a story to share about scam calls.

In my first six months in Taiwan, I received at least three such calls.

In some cases, the fraudster would even pose as the fraud-buster.

Just some weeks ago, I picked up a call from someone who identified herself as a representative of the police's anti-scam hotline. I was told I had to file a report because my phone line had been tapped for use by a fraud syndicate.

She gave me the case number and even offered to transfer my call to the police department. But I declined because it sounded fishy.

It was only later that I discovered it was a common tactic used by tricksters exploiting the public's lack of familiarity with government procedures.

If I had followed the woman's advice, I could have been coaxed into volunteering my personal data, including my bank account details.

According to police data, phone scam cases have gone up by about 6 per cent to 42,910 last year, from 40,348 in 2007. Victims lost some NT$12.3 billion (S$551 million) last year.
But some believe the official figures may be just the tip of the iceberg, as many cases go unreported. Almost one in 10 in Taiwan has fallen prey to phone scams, according to a survey of about 2,000 people by the National Chung Cheng University.

'Some people don't report to the police as they feel that it's a loss of face. Or they don't think that the culprits would be caught anyway,' said Professor Cheng Jui-lung, a criminologist from the university.

Two weeks ago, a man in his 60s from the southern Kaohsiung county was crowned the most easily conned man in Taiwan by the media, after he was cheated of some NT$3.5 million over 11 times in two years. He repeatedly fell for it when callers claiming to be from the Hong Kong lottery or turf club told him he had won a pot of money. The catch was that he must first transfer over 'guarantee fees' of NT$200 to NT$476,000 - money which he never saw again.
Last year, he received another call claiming that the criminals had been nabbed but he was asked to pay NT$220,000 in 'security fees' first. And he was duped yet again.

The elderly are not the only vulnerable targets. Those in their 20s and 30s also make up a large percentage of scam victims, police statistics showed. This group tends to shop online, and their personal data could be easily stolen or bought illegally by fraud syndicates, said Associate Professor Tsai Tyan-muh, who teaches crime studies at the Central Police University.

Experts say these scams usually exploit one's sense of fear or greed. Typically, callers hired by such syndicates would pretend to be from the bank or the district prosecutors' office, warning potential victims about unpaid bills or the risk of losing money in their bank accounts.

They would then instruct the unsuspecting to transfer their money to a 'safer' account.

Another common ruse is to tell would-be victims that they have won a lottery but have to pay a fee first before they can claim their winnings.

But the phone scam syndicates follow a largely similar modus operandi: Call centres are started in Taiwan or China, calls are made randomly. The unsuspecting are asked to transfer money and the loot is picked up by runners.

Prof Tsai traced the rise in such crimes to 2000, when mobile phones and automated teller machines became increasingly common. Traditionally, such fraud cases occurred face to face, he noted. 'Now, a mobile phone is all it takes. It's a revolution of criminal methods,' he said.

Indeed, some Taiwanese syndicates are even targeting victims beyond its shores. Last November, five Taiwanese were caught for allegedly cheating eight Singaporeans of nearly S$85,000 with a set-up in China. Chinese callers hired by the Taiwanese group had snared the victims with a lottery scam.

Analysts said the lack of cross-strait cooperation against crime has made it hard for the police to crack down on scam syndicates, many of which have Taiwanese masterminds but are based in China. 'Because cross-strait interactions are muddy and unclear, we can't work closely together to fight crime. There's space for criminals to exploit,' said Prof Tsai. The worry is that such scams could exact a larger social cost. 'If such scams become more common, it will lower the degree of trust between people,' said Ms Chen Man-li, president of the National Alliance of Taiwan's Women's Associations. 'If I don't know you, or even if I know you, I may be less willing to help when you call.'