How does it work?

This is a simple trick carried out in the street by two or three culprit(s), who approach the victim trying to sell herbs / pills / medicine by exaggerating their medical value or tempting the victim to buy products as a joint venture in return for potentially huge profits.  Needless to say, the medicine turn out to be of very low re-sale or medical value.

What is our advice?

• Do not be tempted by this offer. If you feel unwell, consult a doctor; and
• Only buy medicine etc. from reputable outlets where you will have some recourse against the supplier if the need arises.

How does it work?

This scam usually involves several culprits and is a variation to the fake herbs scam.  The first culprit approaches the victim, usually on the street, and asks whether the victim can watch over some goods being unloaded.  The victim is offered HK$200-$300 for the assistance provided.  If the victim agrees to look after the goods, a second culprit who pretends to be interested in that particular item will approach the victim.  He tells the victim that he knows of a lucrative market for the goods, where huge profits can be made.  He goes on to suggest that he and the victim offer to buy some of the goods from the first culprit when he returns.  If the victim agrees, he parts with his cash to receive a worthless batch of products.  Usually the culprits in this scam avoid genuine retailers who are certain to know the true nature of the goods.

What is our advice?

• Do not be tempted by this deal.  Ask yourself why the person is willing to include you in such a profitable transaction.  They have never met you before and could easily keep all of the 'profit' for themselves;
• Never purchase goods 'sight unseen' or if you have no experience in that particular market concerned; and
• Only buy merchandise of this nature from reputable outlets where you will have some recourse against the supplier if the need arises.

How does it work?

These scams involve two to four culprits.  The targeted victims are usually elderly.  The first culprit approaches the victim and asks if he/she has heard of a particular “Doctor” with some super-natural healing power.  A second person, who is part of the same gang, emerges to say he has heard of such person.  The second person then leads the party to meet a third culprit who claims to be a relative of the “Doctor”.  The third culprit alleges the victim that she suffers from some illnesses, usually arthritis and the “Doctor” can help to heal the sickness provided she surrenders some valuables / money for a ritual.

Following the ritual, the culprits return the victim’s valuables, which are wrapped in newspaper, claiming that this is the victim's property.  However, when the victim later unwraps the package, he/she discovers the bundle only contains worthless items and the valuables are gone.

What is our advice?

• Be suspicious of anyone who approaches you on the street and asks strange questions or behaves in a strange manner;
• Temples are the best place for spiritual blessings;
• Do not put your trust in people you don’t know; and
• Discuss with your family first before making any decision to withdraw money from a bank to be used in a spiritual ritual.

How does it work?

This deception usually involves one to two culprits.  One of the culprits approaches the victims, usually teenagers, pretending to be a tourist who has lost his wallet and is therefore in some distress.  The suspect asks the victim to lend him some money.  In return the suspect leaves his contact means to victims.  Later, the victim discovers the contact details to be false. Sometimes the culprit may produce name cards pretending to be reputable persons.

In a slightly different scenario the culprit asks to use the victim's mobile phone to telephone his relative with a view to arranging the loan of some money.  The second culprit answers the call and then asks to speak to the victim.  The second culprit promises to transfer some money into the victim's account if he/she lends some money to the first culprit.  The victim does so, but no repayment is later made to the victim's account.

What is our advice?

• Be suspicious of anyone approaching you in the streets asking you to lend money; and
• Never lend money to anyone whom you do not know unless you have established their true identity and contact details.

How does it work?

Advance Fee Fraud is a scheme devised by fraudster to lure prospective victims to part with a fee in respect of a deal, which does not exist.  It involves an upfront payment by the victim to the fraudster, who promises the victim a project that yields lucrative returns.  Bogus documents are usually provided in order to convince the victims that the promised deal exists.  A common method used by culprits is that they claim themselves to be high-ranking "officials" of a government or agency and they are in charge of funds from previous regime or inherited assets, which they need to launder by transferring it to a foreign account.  Victim is offered a percentage of the funds and required to provide an advance fee for various taxes, fees or bribes to facilitate the processing and remittance.  When fraudster receives the fees from the victim, they disappeared.

What is our advice?

• Do not be greedy;
• Apply common sense, if someone was in possession of large sums of money why would they be prepared to share the money with a stranger;
• Do not respond to any unsolicited e-mails, which entice you to participate in some highly lucrative deals;
• Remember, when things look too good to be true, they are probably not true; and 
• If in doubt, contact or refer the case to police immediately.

How does it work?

Boiler Room Fraud is a fraudulent scheme whereby offenders representing as salespersons or brokers are hired to call up unsuspecting individuals to push investment opportunities.  Cold calls and high-pressure tactics are often used to enforce sales of worthless or non-existent securities, usually to pensioners.

Typically boiler room agents are well trained salesperson and all the information they pass on to customers would be scripted.  In recent years, they make good use of the Internet and decorate their business with fanciful websites. Investors would receive their monthly investment statements through e-mail and rarely come face-to-face with the brokers.  Similarly, investment monies would be transferred electronically often trespassing country borders.  After some time when all investment frenzy subside, victims will find all they are left with are some junk stocks or worthless papers.

What is our advice?

• Be vigilant of unsolicited phone calls or e-correspondences concerning investment matters;
• Examine relevant website to verify if a firm’s credentials are legitimate;
• Seek expert advice from professionals;
• Do not join any investment unless you thoroughly understand it;
• Do not transfer money into an overseas bank account unless with a full valid reason; and
• If in doubt, contact or refer the case to the police immediately.

How does it work?

Recovery agents are non-legally qualified persons that ‘help’ victims in personal injury cases to pursue their claims for compensation.  The recovery agents proactively ‘hunt’ potential victims at strategic locations such as the Accident and Emergency wards in the hospitals, and have earned the nickname ‘ambulance-chasers’. 

Recovery agents operate on a "no win, no fee" basis and will take a percentage of the damages recovered as their service fees.  Victims are required to sign agreements to pay 10-30% of the compensation in successful claims whilst recovery agents will arrange lawyers for them.  These “champertous” agreements are unlawful and unenforceable.  The recovery agents will not act conscientiously to protect the rights of the victims, rather they would share the compensation granted to victims, who may end up not having sufficient means to maintain their livelihood.

What is our advice?

• Do not fall victim of the attraction of “No win, no fee” – you end up paying the agents and the lawyers much more than you have to when you get your deserved compensation;
• If you do agree to enter into such arrangements with recovery agents or lawyers, you may be committing criminal offences;
• Be aware you may qualify for full or partial legal aid from the Legal Aid Department; and
• If in doubt, contact the police immediately.

How does it work?

The seized counterfeit Hong Kong dollar banknotes are insignificant in number and mostly of poor quality, and were mainly produced by ‘Inkjet’ or ‘Toner’ printers.  These counterfeit banknotes have no security feature, which are smooth in surface and giving no embossed feel.  They may even have the same serial number.

Nowadays, business and commerce between the Mainland and Hong Kong are frequent.  Both Hong Kong and CNY banknotes are widely circulated in the two places.  In recent years, about 40% of the counterfeit banknotes seized in Hong Kong were CNY banknotes

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In the past, Hong Kong residents received counterfeit banknotes (including counterfeit CNY and Hong Kong banknotes, with counterfeit CNY banknotes in the majority) through ‘Money Swapping’ scams conducted by fraudsters while travelling in the Mainland.  The usual modus operandi of culprits is to swap the genuine banknotes with the counterfeit ones when the customer makes payment to the hired vehicle or for goods.  Some victims put their propert ies in lockers provided in massage establishments .  The culprits then open the lockers and swap the money.

What is our Advice?

• Browse the web pages of the Hong Kong Monetary Authority and the People’s Bank of China to familiarise yourself with the security features of Hong Kong banknotes and CNY banknotes;

• Be careful while receiving or changing banknotes;
  
  
• Check the security features of the banknote, such as holographic windowed thread and the watermark; rub its surface to see whether it gives you an embossed feel and see if the colour of the banknote fades;

• On receiving a counterfeit banknote, you should immediately hand it over to the Police or a bank; do not attempt to reuse it, otherwise, you might commit the offence of “Passing counterfeit notes” under Section 99 of Crimes Ordinance, Chapter 200, the Laws of Hong Kong;
  
  
• Pay attention to police publicity campaigns so as to heighten your awareness in this regard; and

• In case of doubt, seek assistance from the Police or banks.

How does it work?

With advances in technology the options available to criminals have increased dramatically. This is especially so in the area of credit card fraud. Billions of US dollars are lost annually world-wide to credit card crime.

Nowadays it is not necessary for criminals to have your card in their possession in order to access your account.  Therefore, it is essential personal data and credit card data are well protected.  This means you should be vigilant when using your card.  Ensure that it is not "skimmed" (electronically swiped by an unauthorized magnetic code reader, thereby storing the credit card data for unauthorized use later), or copied in any other way.  Always ask vendors to complete card transactions in front of you.

Armed with little more than your personal data some criminals will apply to issuers for credit cards in your name.  It is unlikely you will know anything about the fraud until it is too late - that might be when you yourself want credit and are refused.  It is important, therefore, to protect your mailbox (always a rich source of personal data), and to be careful what you subscribe to - particularly online. Beware also the bogus data collector, posing either as a man from an utility company, a bank, an electoral registrar, or as a census and statistics officer.  Here be careful what information you give over the phone, as callers can be hard to verify, and might catch you unaware.

The most common form of card fraud is the use of a stolen card.  Stolen cards are generally used immediately after their theft, as the culprit knows he/she doesn't have long before the card is reported as being lost and is cancelled.

Most cards are stolen from the post, or from bags and jackets.  Some thieves, however, pose as bar staff to obtain credit cards.  Better equipped and more professional gangs will steal a card, skim or copy it, then replicate it quickly for use.  The original card is returned to the owner, usually before he/she realises it is missing.  Several cases have occurred when casual acquaintances or sex workers have added a drug to the victim’s drink.

Take good care of the card, and check your account statement regularly.  Always report to the issuing company the moment you become aware of any loss.

There are a variety of methods that criminals use to obtain card details and ATM PINs ranging from simply looking over the victim’s shoulder to installing pin-hole cameras in the ATM machine.  Stolen data is then used to replicate the ATM card.  The alternative is victim's ATM card is stolen.  Thereafter the target bank account is drained of cash.  Take care, when punching your PIN number into an ATM. Cover your hands if possible, and guard against people looking over your shoulder.

What is our advice?

• Never disclose your ATM PIN to anyone;
• Take care to hide your PIN from prying eyes when using an ATM machine or other device;
• Take care of your personal data. Do not hand it over without first verifying the recipient, and the use to which it will be put; and
• Secure your mail box; and Report any compromise or theft of your credit cards/ATM cards without delay to both the card issuer and police.

How does it work?

Letter of Credit Fraud and Invoice Financing Fraud are the most common Documentary Fraud. 

Letter of Credit is a written undertaking by a Bank issued on instructions of the buyer of goods to the seller of goods to effect payment under stated conditions, which is basically being perpetuated by means of (i) Short shipment (shipping goods of no value), (ii) False shipment and (iii) L/C Kiting, etc.

Invoice Financing is a credit facility provided by the bank to its client company (either buyer or seller) to ease cash flow upon production of purchase or sale document, in which Invoice Financing Loan is for buyer and Factoring Loan is for seller.  Common example for Invoice Financing Fraud is buyer and seller conspired together to tender forged trade documents in the loan applications.

What is our advice?

• Check credit and irregularity on price, stock, package, shipment etc;
• Inspect the goods by independent party and to use well-established shipping company for delivery; and
• Strictly comply with the “Know Your Customer” Policy.

How does it work?

The Employment Related Fraud scams are currently perpetrated by means of the following three major ways: -

• Employment Deposit Fraud

Victims respond to newspaper job offers which do not require high education qualification but offer attractive remuneration.  When victims phone the fraudsters, they are enticed to pay employment deposits to secure their job offers, or required to make payments to apply for licence, work permit or training course, ranging from several hundred to several thousand dollars.

• Mystery Customer Employment Fraud

Fraudsters post full-time or part-time job offers on the local Internet discussion forum.  In the disguise of recruiting ‘Mystery Customer’ for service quality surveys, the fraudsters entice the victims to obtain personal loans from the financial institutions using their own identities.  After the victims hand over the loan proceeds, the fraudsters are then out of contact.

• Training Course Fraud

The fraudsters conduct street survey to collect personal contact details from the victims.  Later, they offer marketing jobs to the victims and lure them to attend recruitment interviews and seminars.  The fraudsters criticize the language proficiency and appearance of the victims, and enticed them to join the English learning courses or beauty treatment packages.  The lucrative marketing job never materializes, causing monetary loss to the victims.

What is our advice?

• Understand the company background, business, job nature and work location before attending the recruitment interviews;
• Pay attention to whether the remuneration and qualification required is commensurate with the job market;
• Be cautious to lucrative job offers, which do not require any job-related skills;
• Companies normally provide training to their staff free of charge. Beware of those companies which require you to pay employment deposit in order to secure the job positions; and
• Do not post your personal details on the Internet. Do not trust the Internet job advertisements or messages too readily.

How does it work?

Insider dealing is prohibited in Hong Kong's Securities and Futures Ordinance.  Although the offence can be committed in different forms, the legislation is generally directed at prohibiting the misuse of confidential price-sensitive information by employees of a company for the purpose of trading in the company's stock to make a profit or avoid a loss.

An example to illustrate insider dealing would be where a person who works in the company and from his official capacity knows of an imminent acquisition by another company which has not been yet announced to the public.  That person therefore purchases shares in the company anticipating that the stock price would rise after announcement of the acquisition.

What is our advice?

• Do not take part in stock trading based on insider information;
• Such conduct has been criminalized since 2003, and is regarded as one of the most serious commercial crimes;
• The Insider Dealing offence will cover not only the subject person but also one’s immediate family and anyone acting in concert; and
• Publicly listed companies should promote corporate governance, institute accountability and increase transparency to the public.

How does it work?

The insurance intermediary (agent or broker) steals premium by not forwarding client’s payment to the insurance company; or the insurance intermediary manipulates policy by false instrument and without the policyholder’s knowledge.  These frauds include withdrawing dividend or loan by falsifying policyholder’s signature, and deceiving commission from the insurance company by making false policy.

What is our advice?

• Do not pay the premium by cash;
• Confirm your insurance policy with the insurance company;
• Regular check the monthly or yearly statement; and
• If you find any suspicion in your insurance policy, make enquiry with the insurance company directly.

How does it work?

To attract and lure victims into investment transactions, fraudsters generally use free investment seminars they organized as bait or they approach victims they picked at random. Subsequently, the fraudsters will ask the investors to deposit money in an account and sign documents authorizing a third party to invest on their behalf. However, the agents do not invest in the investors’ interest. They frequently make multiple transactions in which they charge commission each time. The victims eventually find themselves losing all their capital within the transactions because of investment losses and commission deducted.

What is our advice?

• Seek expert advice from professionals before buying complicated investment products;
• Make transactions at selected reputable financial companies or banks;
• Apprehend all the terms and details on any agreements, authorization documents or contracts if you are going to sign them;
• Never disclose the online user login name and password to anyone; and
• Check immediately all the transaction records upon receipt of accounts’ statements. If any suspicious or unauthorised transaction is found, make enquiries with the relevant financial company or bank as soon as possible.

How does it work?

A person receives unsolicited messages either by SMS, telephone call, posted mail or email that he/she has won a large cash or valuable lottery prize organised by an internationally-renowned organisation.  The victim, attracted by the prize, makes a response and communicates with the fraudsters who use stalling tactics with convincing claims that the prize money was being held with certain reputable banks / financial institutions / government organisations.  Subsequently, the victim makes remittances, either through banks and / or remittance agencies, to various bank accounts or unknown persons / recipients overseas as administrative fees. 

The victim might become suspicious initially after a few payments to the fraudsters but when the victim is referred to other associates in the scam or the so-called ‘professional people’ – fictitious legal professionals, bank managers, and even police officers – each time with the production of fictitiously sealed official documents, the victim is once again convinced and therefore makes further payments as insurances fees, handling charges, local and provincial government taxes, etc.  The process is continued until the victim finally realises that he/she has been deceived.

What is our advice?

• If it is too good to be true, it probably is;
• Be Aware – remember that if you had not entered any prize or lottery draw in another country or with any internationally-renowned or recognised organisation – you have most probably NOT won a prize;
• Be Alert – remember that real lottery prizes do not need your payment to redeem them – otherwise it is LIKELY to be a scam;
• Never deposit money into a bank account unless you know the account holder; and
• Report any suspicious SMS, telephone call, post mail or email on suspected lottery frauds to Police at the first opportunity.

How does it work?

Put simply, “money laundering” covers all kinds of methods used to change the identity of illegally obtained money (i.e. crime proceeds) so that it appears to have originated from a legitimate source.

A money laundering scheme will therefore usually involve a combination of several different techniques and vehicles, which may not necessarily involve the conventional financial sector.

The techniques for laundering funds vary considerably and are often highly intricate.

In Hong Kong, crime proceeds are generated from various illegal activities. They can be derived from drug trafficking, smuggling, illegal gambling, bookmaking, blackmail, extortion, loan sharking, tax evasion, controlling prostitution, corruption, robbery, theft, fraud, copyright infringement, insider dealing and market manipulation.

When crime proceeds are laundered, criminals would then be able to use the money without being linked easily to the criminal activities from which the money was originated.

What is our advice?

• Anti-money laundering is everyone’s responsibility. Do not deal with it;
• When you come across any property, which you know or suspect to be crime proceeds, you should make a suspicious transaction report (STR) to the Joint Financial Intelligence Unit (JFIU); and
• Whilst there is no prescribed manner of reporting, it is advisable to make STRs in writing. A standard form has been designed to assist individuals in making STRs. The form can be downloaded from the JFIU website (www.jfiu.gov.hk).

How does it work?

The fraudsters approach victims on the street offering them modelling job with purportedly lucrative reward.  The victims are pressurized to pay an upfront fee for beauty packages, photo-shooting packages or training courses organized by their associated companies.  Eventually, the lucrative modelling jobs will never materialize, leading to monetary loss of victims.

What is our advice?

• Be suspicious of approaches in the street;
• Do not go alone to an agency office.  If you are under 18 years of age, always have a parent or guardian accompany you. Regardless of age, it is always a good idea to have a friend with you who can corroborate any evidence that the company has misrepresented itself;
• Always read every part of a contract before you sign it.  Make sure you understand every aspect of the contract;
• Do not pay any upfront fees, as this normally indicates something suspicious;
• Be suspicious when promised unreasonably high remuneration for modelling jobs; and
• Be alert when dissuaded from asking your family or friends for advice.

How does it work?

Property fraud is a form of real estate fraud where culprits misrepresent as owners of a property to obtain a mortgage loan he will not ordinary qualifies for.  Mostly, the culprits use forged land title deeds and forged HKID cards in the fraud.  The culprits disappear once they obtain the full loan amount.  The fraud then comes to light when the lending institution chases the genuine property owner for repayment.

What is our advice?

• Guard your personal and financial information – Be vigilant with all personal and financial data.  Be especially suspicious if someone contacts you and asks you to provide information.  Before responding, contact the company directly to confirm the call or email is from them;
• Keep your mail safe - Your mail contains personal information and account numbers.  Collect it promptly from your mailbox and shred them before you discard them;
• Lock it up - Keep your personal information locked up;
• Stay safe online – Never respond to unsolicited requests for personal information and always use virus protection. Protect your computer with a password, change it frequently and don't share your password with anyone; and
• Make prompt report - Report stolen credit cards and identity cards immediately.  If in doubt, contact or refer the case to police immediately.

How does it work?

Multilevel marketing scams are also known as Pyramid Schemes.  They are occasionally reported in the newspapers, but always after they have collapsed, leaving many people with financial losses.

Pyramid schemes are schemes designed to make money by recruiting people, rather than by selling legitimate products or providing a service.  Income comes from the participation fees that the participants are required to pay.  The participation fees that these new participants pay give them the “right” to recruit further new participants and receive income.  In other words, the only way for a participant to ever recover any money is to convince other people to join and to part with their money as well.  In order to secure a stream of money coming into the scheme to be carved up by the establisher of the scheme and its existing participants, the stream of participants needs to go on and on.  Early members may get some dividends but when the pyramid crashes, which it will ultimately do, everybody except the person at the top loses.

What is our advice?

• Do not get involved in pyramid schemes, they do not work and you will end up losing money;
• Quick money is not so easy to make;
• Under the new Pyramid Schemes Prohibition Ordinance, anyone who induce or attempt to induce others to join a pyramid scheme, with knowledge that the benefit they may get are entirely or substantially derived from the introduction of further new participants, will be held criminally liable.
• Be aware if something which sounds too good to be true; and
• Ignore pleas, persuasion and implied threats.

How does it work?

The scam here involves the culprit calling the victim by telephone and assuming the identity of one of the victim's relatives, friends or business associates.  The culprit claims that he/she is experiencing financial difficulties and in need of money.  The victim is asked to deposit or transfer money into a designated bank account provided by the culprit.  The victim subsequently discovers the call to be bogus.  The police investigation reveals that the culprit opened the bank account by using either a bogus or stolen ID card.  Alternatively, the account was opened by someone other than the fraudster.

What is our advice?

• Make up a code word, (for family members only) to be used in emergencies;
• Tell the relative, friend or business you will call them back on their known number to verify the story;
• Do not transfer any money under any circumstances; and
• Make a report to police if you suspect the call to be bogus.

How does it work?

It is common practice for timeshare sales representatives to approach customers by making “cold-calls” or by way of street surveys. Potential customers are offered free gifts, coupons or the chance of winning a prize, as way of encouraging them to attend these types of seminars. 

During these seminars well-trained sales representatives use high-pressure sales tactics, offering discounts to persuade customers to join the timeshare scheme.  Usually the victims are convinced to sign an agreement immediately.  These high pressure sales seminars usually last for several hours, many customers eventually sign the agreement to join the scheme through greed, or because they feel too embarrassed to refuse, or are just so tired due to the lengthy sales talk.  Customers sign up and either pay the fees in full or by a deposit followed by monthly installments. 

What is our advice?

• Do not be greedy;
• Do not join any schemes without thoroughly understanding and reading a contract;
• Make sure you understand and agree to the clauses of any agreement before signing it.  Take it home and read it; and
• Make a report immediately to the police (999) if you are prevented from leaving such seminars.