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FEATURE: Education the key to tackling rampant fraud

One of the last things anyone wants to experience is being swindled out of their hard-earned money.

Statistics, however, show that almost half of Taiwanese have been contacted by scammers at one time or another attempting to defraud them of their savings.

In Taiwan, about 3.47 million people have filed complaints with the government’s “165” anti-fraud phone line since it was established in April 2004, about 46 percent of the country’s 7.54 million households.

Estimates based on a national survey conducted by the Crime Research Center at National Chung Cheng University say that con artists swindled more than NT$155 billion (US$4.79 billion) from 590,000 households last year — a profit of NT$24.65 million per day for the crime syndicates.

Police statistics show that the money involved in scams that were reported last year totaled NT$11.75 billion, saying the discrepancy between the two estimates was because some victims did not report incidents to the police.

Last month the Control Yuan censured the Executive Yuan, the National Communications Commission, the Government Information Office and the Ministry of Education for neglecting the seriousness of the problem, which followed a reprimand it gave to the National Police Agency, the Financial Supervisory Commission and the Ministry of Transportation and Communication (MOTC) in 2004 for failing to combat fraud.

Corrective measures appear to have been of little use as the country continues to see a rise in fraud cases.

Between January and July, the number of scams in which people had money stolen from their bank account was 23,324 — 6,861 of which were via mobile phone and SMS, which represented a 3.12 percent increase from the same period last year, NPA statistics showed.

Sandy Yeh (葉毓蘭), an associate professor at the the Central Police University’s (CPU) Department of Foreign Affairs, said that a major reason for fraud being so rampant was that the government hadn’t put enough effort into equipping police with the ability to stop the fraudsters.

“Fraud goes unchecked as it is a low-cost, high-profit crime. The advancement of communications technology makes it easy for the syndicates to gain access to victims, while ferreting out the masterminds behind this organized crime is very difficult,” Yeh said.

The Criminal Investigation Bureau has discovered Type II telecommunications operators that offer simple voice resale services, Internet telephony services and telecommunications services that provide international communications to anonymous customers by leasing international circuits or other services. The MOTC has made these illegal, along with operators of the services, which have been great tools for con artists.

In collusion with fraud syndicates, the operators provide telecoms equipment rooms with devices by which the person receiving the call would believe the incoming calls or messages are transmitted from government agencies, while the syndicates frustrate police efforts to track the origin of the calls.

One man surnamed Chang said he was almost deceived when he received a voice message on his mobile phone telling him that one of his bank accounts had been used as a dummy account to carry out money laundering, as the incoming number was the telephone number of the Taipei District Court.

“Technology changes with each passing day and the government hasn’t done enough to develop countermeasures. It earmarked a really small budget in this regard. For example, it spends less than a few tens of thousands of NT dollars on overseas training for CPU students each year,” Yeh said.

Yeh also called on the government to pass legislation that requires a new telecoms technology to have in place countermeasures for the government to use to prevent and detect crimes committed using it.

Cheng Jui-lung (鄭瑞隆), dean of CPU’s Department and Graduate Institute of Criminology, said the government suffers from structural problems that make it hard to hunt down fraud syndicates.

“As the government is subject to bureaucratic budget and procurement rules, it’s not as adaptable as fraudsters in applying new technologies. That many syndicates behind the scams have cross-border networks to carry out long-distance operations also makes it difficult for police to track them down,” Cheng said.

Despite all this, Cheng said the government should cooperate with telecoms operators to work out measures that could locate telecoms equipment rooms at the transmitting end and intercept or cut off telecommunications, as well as to negotiate with other countries on agreements for mutual legal assistance in criminal matters.

“The government is not the only one that should take the blame for the increasing crimes. Raising public awareness of crime and advising people not to hand over personal data to fraud syndicates to set up dummy accounts in exchange for profit is also an effective way to deter the con men,” he said.

Frank Huang (黃富源), a professor at CPU’s Crime Prevention Department and adjunct professor at National Taipei University’s Graduate School of Criminology said the government should allocate more resources to collecting the latest information on the methods being used in fraud cases.

“The police should publicize information on new scam tactics and change the 165 anti-fraud phone line from just receiving calls to educating the public on how not to get conned,” Huang said.
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