China has the largest internet market in the world, and it is prone to scams and fraudulent activities. In order to combat this, Chinese regulators have launched a crackdown on online scams.
The regulators have revealed that scammers have been creating several counterfeit financial service apps to trick consumers.
Chinese Regulators' Crackdown on Fraudulent Apps
On Friday, July 1, the country's watchdog Cyberspace Administration of China (CAC) has removed a total of 42,000 counterfeit apps. The watchdog began removing the fake apps in January 2022.
The removed apps are added to the fraud blacklist, according to a statement posted by the regulator on its official WeChat account. The list includes more than 3.8 million websites and a total of 514,000 apps.
CAC added that scammers are the reason behind a growing number of counterfeit finance apps that imitate platforms like JD Finance and Mashang Consumer Finance, China's largest online lenders to consumers.
According to Reuters, the regulator found 5,677 fake apps were found to mimic JD Finance. The massive numbers cited by the regulator show the vast potential market of the country, as China has more than 1.4 billion people.
As of December 2021, China has the world's second-largest economy as it has more than 1 billion internet users.
According to the China Internet Network Information Center, the country is also the world's biggest market for smartphones and personal computers.
In the past few years, the use of apps for online scams accounted for 60% of all the telecommunications network-related fraud cases in the country, according to Xinhua News Agency. The fake apps imitate platforms for part-time online billing and fast loans, which major banks also offer.
The CAC was working with the Ministry of Public Security and other relevant departments to keep track of the online scams and establish a warning system online to protect consumers and alert them if an app is fraudulent or not.
On June 12, SCMP reported that online fraudsters failed to steal $3.7 million from a woman's savings in eastern China after the local police were able to warn her successfully.
The woman from Hangzhou, who is only named Sun by the authorities, almost had her bank account emptied after she got a call from someone pretending to be a member of staff from a training school that her child had attended.
The fake staff offered her a refund of fees, claiming the school could do so because of its improved financial situation.
How Scammers Have Conned Consumers
SCMP reported that back in June, regulators caught a scammer who conned an internet user from the eastern Shandong province.
The victim, who is only named as Qin, was scammed out of $8,950 after downloading a counterfeit Mashang Consumer Finance app. The fake app had asked Qin to pay $1,400 for financial loan insurance and $7,400 as a capital verification fee.
However, no loan was given to Qin, and no money was ever returned.
In Hong Kong, scammers have conned $163 million from more than 6,000 victims of online deception and phone scams in the first four months of 2022.
Almost one-fourth of the money the victims lost was swindled through email fraud, in which 102 companies and 25 people were scammed out of $49 million between January and April 2022.
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Written by Sophie Webster
