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China’s War on Telecom Fraud

As technology continues to evolve, so too does online fraud. In response to this growing issue, China has taken a strong stance against digital criminal activity by introducing its first Anti-Telecom Fraud Law that went into effect on 1 December 2022. This law is designed to protect citizens from becoming victims of online fraud on a domestic and foreign scale. The law includes measures such as enhanced monitoring and enforcement of telecom services, increased penalties for offenders, and improved consumer protection measures. Additionally, the law also requires telecommunication companies to implement stronger security measures and take more responsibility for preventing fraud.

The Chinese government’s fight against telecom fraud is a testament to their commitment to protect their citizens from online scams. The implementation of the Anti-Telecom Fraud Law of China serves as an example for other countries looking to combat this growing problem in the digital age. 

China has been actively waging a war on telecom fraud over the last few years. Rightfully so, as online fraud is one of the most pervasive crimes in China. According to The National People’s Congress (NPC), Chinese police authorities were reported to have resolved more than 441,000 cases of telecom and online fraud, arrested more than 690,000 criminal suspects in 2021 alone, and busted 39,000 criminal gangs. The staggering numbers continued through 2022; another 153,000 telecom and online fraud crime cases were solved.

“Fraud groups are well-organized and have a clear division of labor, and their criminal chains often involve multiple industries and different regions or countries. The group’s main members usually live overseas and use high payments to lure and recruit inexperienced young people to engage in fraudulent activities in China or other countries,” Jiang Guoli, deputy director of the Criminal Investigation Bureau

Online fraud has been a growing problem in China for many years. As a greater number of people connect to the internet, there is a higher chance for more people to become vulnerable to online fraud and scams. Fraud in the virtual space is convenient and easier to disguise, causing wider concern for its rapid growth. Online fraud dates back to the early 2000s when telecom fraud first started to emerge. However, it has since become increasingly sophisticated and widespread. Cases involving money laundering, identity theft, and other types of financial crimes have become more common. It is estimated that, in 2019 alone, around $1 billion was lost to online fraud in China. Furthermore, this number grew exponentially during the COVID-19 pandemic in 2020. The impact of the economic downturn and stay-at-home mandates made the fight against fraud even more difficult. 

While the Chinese government has taken steps to combat this crime by introducing regulations, enhancing prevention, and increasing public awareness about the dangers of online fraud, this Anti-Telecom Fraud Law is expected to put a “priority on prevention”. According to Caixin Global, the law requires the police force to work with an extended team of financial, telecom, and cyber regulators as well as service providers to establish “a system of early warning and dissuasion to identify potential victims and dissuade them from proceeding with the fraudulent transactions.” It is also important to note that this law carries through cross-border and the importance of collaborating with cross-border officials is crucial. 

There’s no doubt that the Anti-Telecom Fraud law is the right direction for a positive impact on crime. Experts in the telecom and finance space support the law while encouraging foundational orders.  These will act as additional efforts to battle online crime and fraud. Expanding public awareness across all business sectors, prioritizing prevention methods, and providing resources and training can also help strengthen government efforts.