Chinese regulators reveal their crackdown on scam apps for months as scammers mimic financial services

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China has the largest internet market in the world and is prone to scams and fraudulent activity. In order to combat this, Chinese regulators have launched a crackdown on online scams.

Regulators have revealed that scammers have created several counterfeit financial services apps to trick consumers.

Chinese regulators crack down on fraudulent apps

On Friday, July 1, the country’s watchdog, the Cyberspace Administration of China (CAC), removed a total of 42,000 counterfeit apps. The watchdog began removing fake apps in January 2022.

Removed apps are added to the fraud blacklist, according to a statement released by the regulator on its official WeChat account. The list includes over 3.8 million websites and a total of 514,000 apps.

The CAC added that scammers are behind a growing number of counterfeit finance apps that mimic platforms such as JD Finance and Mashang Consumer Finance, China’s largest online lenders to consumers.

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According Reuters, the regulator discovered that 5,677 fake apps imitated JD Finance. The massive figures cited by the regulator show the country’s vast potential market, as China has more than 1.4 billion people.

In December 2021, China was the world’s second largest economy with over a billion internet users.

According to Chinese Internet Network Information Center, the country is also the world’s largest market for smartphones and personal computers.

According Xinhua News Agency. Fake apps imitate online part-time billing and quick loan platforms, which big banks also offer.

The CAC was working with the Ministry of Public Security and other relevant departments to track online scams and establish an online alert system to protect consumers and alert them whether an app is fraudulent or not.

June 12, SCMP reported that online fraudsters failed to steal $3.7 million from a woman’s savings in eastern China after local police successfully tipped her off.

The Hangzhou woman, who is named only Sun by authorities, nearly had her bank account emptied after receiving a call from someone posing as a staff member at a training school her child had frequented.

The bogus staff offered him a fee refund, claiming the school could do so because of his improved financial situation.

How scammers defrauded consumers

SCMP reported that in June, regulators caught a scammer who defrauded a netizen in the eastern province of Shandong.

The victim, who only goes by the name Qin, was scammed for $8,950 after downloading a counterfeit Mashang Consumer Finance app. The fake app asked Qin to pay $1,400 for financial loan insurance and $7,400 for capital verification fees.

However, no loans were given to Qin and no money was ever returned.

In Hong Kong, scammers defrauded over 6,000 victims of online deception and phone scams $163 million in the first four months of 2022.

Nearly a quarter of the money victims lost was defrauded through email fraud, in which 102 businesses and 25 people were defrauded out of $49 million between January and April 2022.

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This article belongs to Tech Times

Written by Sophie Webster

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