Social Media Scammers

By | June 2, 2016

As we all know, the risk of being scammed in China is much higher than in the west, and in recent years, experts have saying the situation has been getting worse. EY Fraud Investigation and Dispute Services (EY FIDS) have evaluated the current environment of China’s social and business networks, and have found that within the past two years there has been a rise in criminal activity, namely in the act of fraud. Most often, these criminals pretend to be executives and request high ranking financial staff to wire funds to certain bank accounts for so called “urgent business”.

These criminals, says Chris Fordam of EY FIDS, spend weeks, months and even years thoroughly phishing information about potential targets through social media channels, company reports, and other online resources in preparation for their scam. Once they have acquired all necessary information they then contact certain people within the company through email purporting to be a high-level executive asking for money to be wired to a third party bank account. These wired transactions would be described in the fraudulent email request as “confidential” or “critical”. The study of EY FITS found that scammers writing these communications often mirror the tone of the person they are impersonating, even in such instances as impersonating them through the phone.
The staff on the receiving end of these communications usually do not question instructions from their superiors, in some cases executive management. Thus, they bypass payment controls and override safety protocols to transfer funds as requested.
“These criminals do their research extremely well … they will also often mirror the tone of the targeted executive and may even accurately reference the fact that the person is overseas for business at the time,” said Chris Fordham, Asia-Pacific leader for the fraud services unit.
One way that the scammers facilitate their moves are through social network platforms through which business talk is regularly conducted between coworkers. The most popular of these networks are China’s “Wechat” and “QQ”. A new, better platform for security in business communication is “Dingding”.
According to EY FIDS, these scams are not specifically targeted to one specific entity, industry, or city, but mostly at organisations with many branches across multiple countries and are publically listed. The key is that these companies have information readily availabe about them plastered all over the internet.
“In Wuhan, Hubei province, an accountant for a car shop was the victim of a fraud carried out on WeChat – the popular mobile social network platform hosted by diversified investment company Tencent – according to a report by regional paper Fuzhou Evening News.
The fraud began when the accountant found herself added to a WeChat group by a person who claimed to be her boss, with six people pretending to be her colleagues.
Daily conversations between her “boss” and “colleagues” convinced her that the group was genuine. Eventually, the “boss” asked the accountant for help with an urgent transfer of funds. The company lost 850,000 yuan.” —South China Post
“Criminals become more sophisticated and inventive … not only are we seeing an increasing amount of this type of fraud, it is also becoming remarkably indiscriminate [in terms of industries],” Chris Fordham says.


CNBizCheck recommends businesses doing business in China and greater Asia as well to take steps to protect themselves and their business’s assets through improving security in communication and establishing protocols with financial staff. These types of scams have risen over the years and so many organisations have lost so much. Business in China requires a sharp eye and attention to detail. CNBizCheck’s products are a great starting point for securing your business, make sure you continue to check up on your business partners, and regularly check our blog for new information!

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