Wednesday, July 2, 2008


Today I share with you two common scams in China. And those scams seem to have gone global with the globalization :)

Scam 1:

Some finance company calls you up offering easy loans to you. Being trusting, you call up the company a couple of times, and voila, your application for loan from the company is approved. You receive an SMS from a bank informing you that the money is already in your account, and you can check your account balance by calling a certain phone number. You call the number, check your account and glad to know the money is already in your account. Happy. But when you go to the bank to withdraw the money, you find that the loan amount has never been credited into your bank account. In addition, all YOUR money in your account has been transferred out to someone else's account and your money just vanishes!

This is a very common scam. The trick is in the telephone number you call to check your account balance. The SMS informing you about the number may appear to be a valid bank phone number, but actually it is not. There is software available out there to make SMS 'appear' to be from some number other than the actual sender's number.

Once you call up the number, you will be duped into believing you are accessing the phone banking system, whilst it is not. You are actually entering the scammer's fake phone banking system. The scammers are waiting for you to enter your PIN number! Once they get your PIN, they will immediately transfer your money out of your account to their own account. And from one account to many other accounts, and from those many accounts to even more accounts. When the sum is small enough in each account, they will quickly withdraw your money from the many accounts they have.

Scam 2:

This is a dumb scam, but somehow it works perfectly. The scammer will send tens of thousands of SMS'es out. In the SMS, the scammer will give you an account number, and ask you to transfer money to that account.

Don't you think this scam is dumb? Who in the sane mind would transfer money to someone you don't know? Yet this scam works!

It works because sometimes people arrange to borrow money or whatsoever that involves money transfer from account to account. It happens that the person who is supposed to transfer the money receive the SMS after his/her conversation with the other party. If he/she is not careful enough to check and ensure that the account number is for the intended party, he/she may just transfer the money to the wrong person! And the scam works!

So next time, when you need to do a money transfer, make sure you verify the account to transfer to is correct.

You may wonder how much money the scammer can gain. How much? Make a guess? The scam was discovered only when the scammer used the money to buy a couple of gold bars. So you go figure.

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