LCQ19: Combating online fraud
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Question :
Information from the Hong Kong Police Force reveals that since 2014, there have been on average about 2 000 online business fraud cases each year, involving a total amount of around $30 million to $40 million. Although there has been a downward trend of corporate-level email scams in recent years, 683 cases involving a total amount as high as $1 billion were still recorded last year. Regarding the Police’s work in detecting online deception cases, will the Government inform this Council:
(1) of the respective numbers of cases in which the suspects in the aforesaid two types of deception cases were prosecuted and convicted in each of the past five years, together with a breakdown by whether the cases involved websites or servers outside Hong Kong; and
(2) given that the Police, in detecting deception cases involving websites or servers outside Hong Kong, may encounter difficulties (including obtaining assistance from banks outside Hong Kong to intercept stolen funds and handling certain crimes committed in other jurisdictions), whether the authorities have explored measures to deal with such difficulties?
Reply:
President,
My reply to the question raised by the Hon Holden Chow is as follows:
(1) Regarding online business frauds and corporate-level email scams, the number of cases and the amount lost in the past five years are set out below:
Online business frauds
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Number of cases | 1 449 | 2 375 | 1 911 | 1 602 | 1 996 |
| Amount lost ($ million) |
43.1 | 48.4 | 40.4 | 32.1 | 34.5 |
Corporate-level email scams
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Number of cases | 1 153 | 1 095 | 968 | 867 | 683 |
| Amount lost ($ million) |
756.2 | 983.7 | 1 368.9 | 1 782.2 | 992.6 |
Online business frauds are usually local cases. Although victims and main offenders are usually in Hong Kong, the online social platforms or websites used for transactions may involve servers located outside Hong Kong.
Regarding corporate-level email scams, more than 40 per cent of the victims of the cases in 2017 are Hong Kong companies. The vast majority of the fraudsters of these cases will send deceptive emails via email accounts outside Hong Kong. Therefore, corporate-level email scams usually involve servers located outside Hong Kong.
In the past five years, the detection rates for online business frauds and corporate-level email scams are respectively 16.7 per cent and 9.4 per cent. The Police do not maintain figures on prosecutions and convictions in respect of these two types of cases (note), nor do they keep statistics on the number of cases involving websites or servers outside Hong Kong.
(2) In handling cases of online fraud, if the Police need to conduct investigation or adduce evidence in respect of incidents happened outside Hong Kong, it will unavoidably involve the laws and powers of different jurisdictions. The Police will encounter various difficulties in the course of investigation, evidence collection, arrest and prosecution, and the process is time-consuming. As in other cases involving cross-boundary crimes, the Police will conduct intelligence exchange and seek co-operation with relevant Mainland and overseas law enforcement agencies.
The Cyber Security and Technology Crime Bureau (CSTCB) and the Commercial Crime Bureau (CCB) of the Police jointly co-ordinate the resources of various regions to formulate all-round strategies to combat online frauds, including intelligence exchange and enforcement actions, multi-agency co-operation and stepping up of publicity and education to combat online frauds on various fronts.
Regarding intelligence exchange and law enforcement operations, to help officers better understand the latest trends of and investigation techniques for online frauds and strengthen international cooperation, the Police are proactively exchanging intelligence and conducting working meetings with Mainland and overseas law enforcement agencies. To combat cross-boundary email scam syndicates, the CSTCB launched Operation Panorama in 2017, working with the CCB and Mainland and overseas law enforcement agencies for closer intelligence exchange and analysing various modus operandi. In addition, the CSTCB has been exchanging intelligence with Interpol and other law enforcement agencies through the Interpol Global Complex for Innovation in Singapore, joining efforts to combat cross-boundary online frauds.
As for multi-agency cooperation, the Police and the Hong Kong Monetary Authority regularly conduct meetings on combating commercial frauds, review existing regulatory measures and their effectiveness, as well as look into various recommendations for preventing fraudsters from using bank accounts to commit crimes. The Police are also proactively maintaining communication with banks and secretary companies to remind them of the importance of observing customer due diligence and encourage them to report suspicious applications for setting up companies. Should any financial institution fail to observe customer due diligence, the Police will refer the case to the relevant regulatory organisations for follow-up.
On publicity and education, the Police regularly produces short videos and anti-crime information, as well as introduce the latest modus operandi of fraudsters to the public through various Internet platforms and discussion forums, and by using the Police’s electronic platforms, comprising YouTube channel, the Hong Kong Police Mobile Application, the Police website and the Police Facebook page, Instagram account and the "Fight Scams Together" scam prevention information platform. Furthermore, the Police also disseminate anti-crime messages to the public through Police Magazine and traditional media (television, radio and newspapers).
Moreover, to comprehensively coordinate Police resources, reinforce the combat against deception cases and raise the public’s anti-deception awareness, the Police’s CCB established on July 20, 2017 the Anti-Deception Coordination Centre (ADCC), which operates round-the-clock. Its major duties include: monitoring and analysing the trends of deception cases, with a view to formulating and implementing combating strategies; coordinating anti-deception publicity work; setting up a 24-hour hotline "Anti-Scam Helpline 18222" to facilitate public enquiries and provide timely assistance; and enhancing cooperation with the banking sector to intercept payments to fraudsters, so as to minimise the loss of victims. In the 8 months since it came into operation, the ADCC has received more than 14 600 telephone enquiries, of which about half were general enquiries. Officers proactively provide anti-deception advice to members of the public making telephone enquiries, and assist those in need in making reports. The ADCC also co-operates with the banking sector to intercept payments to fraudsters. In about 690 requests for interception of payments, more than HK$219 million have been successfully intercepted in 154 deception cases. In addition, the ADCC has also successfully prevented 58 different deception cases from happening.
Note: As a general practice, prosecution and conviction figures would only be maintained in respect of specific offences in the law (e.g. "obtaining property by deception" or "theft") but not specific cases. Since a particular case could involve various offences in the law (e.g. corporate-level email scam cases could involve "obtaining property by deception" or "dealing with property known or believed to represent proceeds of indictable offence", etc.), prosecution and conviction figures of specific case nature could not be provided.
Ends/Wednesday, March 28, 2018
Issued at HKT 15:42
Issued at HKT 15:42
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