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Open Sesame: Social Credit in China as Gate to Punitive Measures and Personal Perks

While English-language media describe China’s social credit system as a Black Mirror-like authoritarian implementation, Chinese social media users seem to focus more on the advantages than the burdens.

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Chinese social credit system has become a hot topic – especially in foreign media. But what’s true and what’s not? How is the issue discussed on Chinese social media? What’s on Weibo explores some recent developments in the emerging field of social credit in China.

“Big brother is watching,” some English-language media write, others compare it to ‘Black Mirror,’ while some call it righout “creepy”; China’s emerging social credit system is an issue that many foreign journalists and China watchers are currently concerned with – sometimes even alleging that the Chinese social credit system is “as bizarre as it sounds.”

On Chinese media and social media platforms, there seem to be very different attitudes on social credit in China. Apart from official stances that say it promotes a “harmonious society,” netizens also seem to focus much more on the perks than the alleged dangers of social credit records.

Promotional image for “Tencent Credit.”

Jeremy Daum at China Law Translate published an insightful article (must-read!) in late 2017 in which he made the point that foreign media are grossly conflating Sesame Credit (aka Zhima Credit) and Social Credit, and in doing so, are misrepresenting what is happening in China regarding these systems. So what actually is fact and what is fiction when it comes to the social credit in China?

 

Sesame Credit versus Social Credit

 

There is so much Chinese terminology relating to social credit in China that it is perhaps not that surprising that the lines have become blurred between the actual Social Credit system and a number of private programs.*

In a recent article titled “China’s Social Credit System Is Not What You Think It Is” (in Dutch), ChinaTalk author Ed Sander (@edsander) sets out existing misconceptions about China’s credit systems.

The most important existing misconception is that it is often suggested that there is just one ‘social credit system’ in China. In reality, there are two separate systems that operate independently; the commercial credit systems (such as the Sesame Credit by Alibaba) and the Social Credit system by the Chinese government, which it has promised to roll out nationally by 2020.

 
Sesame Credit (芝麻信用)
 

The system that has arguably been most discussed in foreign media is Sesame Credit (Zhīma xìnyòng 芝麻信用), implemented by Alibaba’s Ant Financial. Sesame Credit already had 520 million users as of 2017.

Sesame Credit example scores explained, from 385 being in the low range to 731 being in the ‘good’ range.

As Jeremy Daum points out, Sesame Credit is one of the business trials that has been granted permission by the People’s Bank of China to experiment with individual credit reporting. NB: The central bank has its own Credit Reference Centre since 2006, which is tasked with operating a national commercial and consumer credit reporting system to enable financial institutions to assess borrowers’ creditworthiness.

Sesame Credit was launched in 2015. Because it is part of the Alibaba family, Sesame Credit has an enormous amount of data at its disposal, from e-commerce sites to finance products (Taobao, Tianmao, Alipay, etc), through which it compiles users’ own scores, going from 350-950, for those who have opted into the program. The scores are based on a number of things, including people’s payment history, their contacts and network, and online behavior.

It is not mandatory for users to opt into Sesame Credit. Some have compared the system to a loyalty program, although it is a bit more than that. Since 2015, for example, Sesame Credit also cooperates with the popular online dating service company Baihe.com (百合网), so that people can link their dating profile to their credit score.

One of the reasons why foreign media have written so much about Sesame Credit as an ‘Orwellian system’ is that it incorporates a publicly available ‘blacklist’ into its scoring process. The ‘blacklist’ is a Chinese courts’ list with the names of people that have an effective court justice against them.

Inclusion on this list can make users’ existing Sesame Credit drop dramatically, which would make people miss out on all perks of having a high Sesame Sore, e.g. no deposits in renting cars, bicycles, or booking hotels (Xinhua 2017).

Some media* have conflated this with the overall negative side effects of being on list of court debtors; it is not Sesame Credit, but the Social Credit schemes that can punish citizens by revoking certain government benefits and putting them on heightened scrutiny until they repay their debts (Daum 2017b).

Besides Sesame Credit, there are also other corporations rolling out credit scores. One of them is Tencent Credit (腾讯信用), which was also established in 2015 and had a trial running in January of 2018.

 
Social Credit System (社会信用系统)
 

China’s Social Credit system is currently not a national one – it is outlined to be implemented nationwide by 2020 – but it is being experimented with in various regions and cities across China.

Screenshot of the official Suzhou social credit website.

Daum (2017) describes it as a ‘policy’ or ‘ideology of data use’ rather than a ‘system’, and explains it as “the Chinese Party-State’s shorthand for a broad range of efforts to improve market security and public safety by increasing integrity and mutual trust in society.”

Chinese social management expert Samantha Hoffman says the system is just “adding technology and adding a formality to the way the Party already operates,” which reiterates a stance by scholar Rogier Creemers, who claims that the system itself is not ‘new’ and can be compared to decade-old ways in which the government is keeping a tab on its citizens (Creemers et al 2016).

The Social Credit ‘system’ essentially will be focused on accumulating and integrating information, and will create measures that encourage ‘trustworthy behavior’ and punishes those who are not ‘trustworthy’ (Daum 2017). It is unlikely that the collected personal data will be reflected in one single score, as has been suggested by various media.

Earlier this year, the PRC’s National Development & Reform Commission and People’s Bank of China released a list of the 12 top cities implementing Social Credit experiments this year, namely: Hangzhou, Nanjing, Xiamen, Chengdu, Suzhou, Suqian, Huizhou, Wenzhou, Weihai, Yiwu, and Rongcheng.

Rongcheng, a county-level city in Shandong province, has been at the center of a recent Foreign Policy article by Mistreanu (2018), which describes how many Rongcheng citizens have already embraced the Social Credit pilot, and seem happy with how it improves the community.

The Rongcheng Credit system is one of both rewards and punishments, as also described of other bigger local systems by Daum (2017b). Online defamation or abuse of family members will negatively affect one’s societal credit, whereas taking care of one’s parents or positively influencing one’s neighborhood will lead to better rankings. In Rongcheng, top rankers are praised by being displayed on a board near the village center (Mistreanu 2018).

 

Sesame & Sharing

 

China’s social credit system and Sesame Credit are a hot topic on social media networks such as Twitter or Facebook, where they are often discussed in negative ways. On Sina Weibo, one of China’s biggest social media platforms, however, both topics are discussed very differently. Sesame Credit is mostly linked to fun extras and the Chinese sharing economy.

At time of writing, Sesame Credit has 240.000 fans on its official Weibo account (@芝麻信用), where they promote the most recent benefits to users with higher credit scores, such as the possibility to get Hello Bicycle (哈罗单车) rental bikes without deposits.

Some netizens discuss the recent cooperation between Ford and Alibaba, in which people with a Sesame Credit Score over 700 points can test drive the new Ford Explorer for three days for free.

Apart from Hello Bike or Ford, there is a myriad of other brands that seem happy to participate in the Sesame Credit system and the idea of Shared Economy.

Mobrella, an operator of umbrella sharing services for urban consumers, allows Sesame Credit users with a score over 600 to use their umbrellas without paying deposits. Anbai (按呗), a company focused on shared massage chairs, also lets 600+ scorers use their relaxation chairs for free.

“Thumbs up for sharing [economy]!”, some netizens comment.

The benefits of a higher Sesame Credit score go beyond brand services. In places such as Shanghai, Hangzhou, or Wenzhou, for example, people with a credit score of respectively 600 and 500 can go to the local library and borrow books for free without paying any deposit. Some places offer public self-service booths where people can borrow their books without having to go to the library.

Self-service library in Shanghai for people with more than 600 Zhima Credit score (via Sohu).

At the Zhejiang University Hospital, patients with a Sesame Credit score over 650 can enjoy privileges such as seeing a doctor first and worry about payment later, or free use of available wheelchairs. In Shenzhou and other cities, people with a 650+ score can rent cars without paying deposits.

There are countless examples of how a higher credit score is making life easier and more convenient for people in dozens of cities across China, which is why a score of approximately 650 is something people strive for. “I overheard some people on the subway today discussing how they could raise their Sesame Credit score to rank over 640,” one Weibo user says: “I’d never even checked my score, but somehow it currently is as high as 810!”

 

Karma & Credit Scores

 

Different from Sesame Credit, the national and/or local social credit system is not discussed much on Chinese social media. When it is discussed, there seems to be more focus on the punitive side of the system than on the rewards.

In early May, for example, a young man from Shanxi was the first local person to be put on the so-called “lose trust blacklist” (失信黑名单), and was banned from traveling by train for 180 days as part of the Social Credit implementation, after jumping over the ticket barriers at Yangling Station. Many commenters supported the ban, saying: “This kind of people with no regard for the rules should be banned from traveling indefinitely.”

“Blacklisted”

Another example is that Guangdong authorities, on May 22, announced the implementation of a special blacklist for people violating the rules of the bike-sharing industry. Those vandalizing a bike, for instance, could be banned from using any bike-sharing service and their social credit will be negatively affected. A top commenter wrote: “Excellent, absolutely excellent – I hope this will be implemented all across the country.”

A recent experiment by Shenzhen police, in which facial recognition technologies were used to catch jaywalkers, also attracted the attention on social media. State newspapers reported that these kinds of traffic violations will also influence people’s personal credit in the future.

Although many people see the social credit systems working as a sort of ‘law of karma’, not all netizens agree. One person responding to the jaywalkers’ case says: “When it comes to traffic violations – we have relevant laws for those. Making them affect one’s personal credit seems to be over the top.”

 

Credit Cities

 

What is noteworthy about the nascent Social Credit systems on Weibo is that many local governments have already set up their own Social Credit Implementation accounts – some have even already been registered in 2014.

Zhuhai (Guangdong) has its own “Social Credit System & Market Control System” Weibo account (@珠海市两建办); there’s an account by Wenzhou (Guangdong) (@温州-谢枫); Suzhou (Jiangsu) (@苏州工业园区信用平台); Suqian (Jiangsu) (@诚信宿迁); Wuhu (Anhui) (@信用芜湖), and others.

Although these accounts are not yet popular, without many fans or discussions, their online presence does signal that Weibo might have hundreds of similar accounts in the future when the Social Credit system is implemented nationwide, with cities informing citizens of new measures and/or guideline relating to the credit system through social media.

With Hangzhou currently being the top city when it comes to building the social credit system, along with the city closely working together with Sesame Credit, it has now even been labeled “Credit City” (信用之城) by Chinese media.

Rather than framed as “creepy” or “bizarre” by foreign media, it is words such as “safety”, “harmony”, and “convenience” that are mostly used by Chinese media to describe these avant-garde cities, where “trust” and “credit” are seemingly becoming a crucial asset for citizens who care about ‘karma’ and ‘personal perks.’

“I support it,” one Weibo commenter writes: “I hope it will have a positive influence on society.”

By Manya Koetse

* Some Terminology:
‘Social credit system’: 社会信用体系
‘Sesame Credit’: 芝麻信用
‘Credit scores’: 信用评分
‘Personal credit systems’: 个人征信系统
‘Credit information services’: 征信服务
‘People’s personal credit structure’: 民间个人征信机构

* Some media such as The Independent in: “China wants to give all of its citizens a score – and their rating could affect every area of their lives.”

References (others linked directly within text)

Creemers, Rogier. 2018. “China’s Social Credit System: An Evolving Practice of Control.”May 9. Available at SSRN: https://ssrn.com/abstract=3175792.

Creemers, Rogier; Peter Marris; Samantha Hoffman; Pamela Kyle Crossley. 2016. “What Could China’s ‘Social Credit System’ Mean for its Citizens?” Foreign Policy, Aug 15
http://foreignpolicy.com/2016/08/15/what-could-chinas-social-credit-system-mean-for-its-citizens/ [26.5.18].

Daum, Jeremy. 2017. “China through a glass, darkly.” China Law Translate, Dec 24 https://www.chinalawtranslate.com/seeing-chinese-social-credit-through-a-glass-darkly/?lang=en [24.5.18].

Daum, Jeremy. 2017b. “Giving Credit 2: Carrots and Sticks.” China Law Translate, Dec 15 https://www.chinalawtranslate.com/giving-credit-2-carrots-and-sticks/?lang=en [27.5.18].

Mistreanu, Simina. 2018. “Life Inside China’s Social Credit Laboratory.” Foreign Policy, April 3 http://foreignpolicy.com/2018/04/03/life-inside-chinas-social-credit-laboratory/ [26.5.18].

NDRC. 2018. “首批社会信用体系建设示范城市名单公布.” http://www.ndrc.gov.cn/, Jan 9 http://www.ndrc.gov.cn/xwzx/xwfb/201801/t20180109_873409.html [26.5.18].

Sander, Ed. 2018. “China’s Sociaal Kredietsysteem is niet wat je denkt.” ChinaTalk, May 5 http://www.chinatalk.nl/chinas-sociaal-kredietsysteem-is-niet-wat-je-denkt/ [26.5.18].

Sohu. 2017. “芝麻信用分600以上可以免押金借书了.” Sohu, Sept 13 http://www.sohu.com/a/191704017_402387 [27.5.18].

Xinhua. 2017. “Chinese courts use technology to tighten noose on debt defaulters.” China Daily, Oct 4 http://www.chinadaily.com.cn/china/2017-10/04/content_32830450.htm [26.5.18].

Xinhua. 2018. “深圳交警“刷脸”治交通违章 处罚或将挂钩个人信用.” Xinhua News, May 8 http://www.xinhuanet.com/local/2017-04/24/c_1120864742.htm [26.5.18].

Xiao, Eva. 2018. “Tencent’s new credit system to use payments, social data.” Tech in Asia, Jan 31 https://www.techinasia.com/tencent-credit-launch [26.5.18].

Zhang Yuzhe, Peng Qinqin and Dong Tongjian. 2017. “China Gives Little Credit to Companies Handpicked to Develop Credit-Reporting Sector.” Caixin Global, May 14 https://www.caixinglobal.com/2017-05-15/101089851.html [26.5.18].


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Manya Koetse is the editor-in-chief of www.whatsonweibo.com. She is a writer and consultant (Sinologist, MPhil) on social trends in China, with a focus on social media and digital developments, popular culture, and gender issues. Contact at manya@whatsonweibo.com, or follow on Twitter.

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China Digital

Privacy or Convenience? Forced Deletion of WeChat Contacts Generates Surprising Reaction from Chinese Netizens

The story of an aggrieved employee forced to delete his WeChat contacts by his boss has brought more applause than outrage on the Chinese Internet. 

Gabi Verberg

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The case of an employer, abusing her power to make one of her employees delete all his colleagues from WeChat, became a hot topic on Chinese social media earlier this week. As the news hit over 350 million views, few netizens worried about the employees’ deprivation of privacy and more discuss the advantages of being forced to clean up your WeChat contacts.

On November 18, the hashtag “Prior to Resignation, Employee Is Required to Delete Colleagues from WeChat” (#辞职先删同事微信#) went viral on Chinese social media, racking over 350 millions views.

On July 26, a Ping’an Life Insurance Company (平安人寿保险公司) employee, surname Wang, handed in his letter of resignation. To complete the resignation process, his employer, surname Kou, demanded he delete all the contacts of Ping’an co-workers from his WeChat. Wang complied and moved without a fuss, but not for long.

Unable to ignore his unease at the way he had been treated, Wang inquired the HR department of Ping’an on the resignation procedure, only to find that deletion of one’s co-workers’ WeChat contacts is in no way obligatory.

Feeling aggrieved at having had his privacy infringed upon, Wang repeatedly tried to get an apology from his former employer, even turning in a letter of complaint to the Sichuan Bank and Insurance Regulation Bureau (四川银保监局). However, the apology never arrived –that is, until the matter caught the attention of Chinese netizens.

Letter of complaint

Red Star News (红星新闻) was the first media outlet to obtain a statement from Kou on the incident.

Though she did not deny asking Wang to delete his contacts, she denied having forced him to do so: “He is 1.80 meters tall, and I am only a little taller than 1.50 meter. If he hadn’t agreed to cooperate, I would never have been able to force him,” observed Kou.

She went on to explain that the decision was for the benefit of the company. With competing insurance companies constantly snapping up each other’s employees, Kou believed Wang’s possible defection to one of Ping’an’s rivals would have a demoralizing effect on her team.

“Wang was employed with us for three years,” said Kou: “I brought him into this industry, taught him how to seal the deal and keep a good relationship with customers. To educate somebody in this industry is not an easy job.”

 

WeChat “friends” are anything but friends.

 

Fortunately for Kou, many netizens construed the incident as a disguised cure for a perpetual problem all WeChat users face – WeChat “friends” that are anything but friends.

“If your relationship with a colleague is good, add him back. If the relationship is not good, then don’t. It will only clean up your phone,” one netizen commented.

Another Weibo user, ignoring Wang’s grievances, observed: “This is perfect, now you don’t need a reason to finally delete those people you don’t like.”

Granted, there were some who criticized Kou’s handling of the situation, viewing the incident as an indictment of the at times sketchy insurance industry. However, many showed empathy towards Kou’s predicament, one netizen asserting that “Kou is just scared  [Wang] will take other colleagues to his new company.”

In any case, the general consensus is not in Wang’s favor; netizens mostly agree that it is not unreasonable for companies to demand employees who just resigned to withdraw from any “work group chats.”

On November 19, the day after the news went viral, Ping’an issued a letter of clarification saying they regretted the situation was handled, followed a hand-written letter of apology from Kou, who acknowledged her lack of consideration.

Apology letter by Kou.

This was enough to satisfy Wang it seems, as both letters mention that all parties had now settled the issue.

By Gabi Verberg, edited by Eduardo Baptista.

Spotted a mistake or want to add something? Please let us know in comments below or email us.

©2018 Whatsonweibo. All rights reserved. Do not reproduce our content without permission – you can contact us at info@whatsonweibo.com

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Top 8 Scams in China to Watch Out for (2018)

From oldskool scams to WeChat scams – people are still falling for this every single day.

Gabi Verberg

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As times change, so do scams. In an age of smartphones and social media, Chinese scammers are more prone to abandon old tricks and use new technology for their swindling business. But in a time of more digital scams, there are also still scammers who use people’s inexperience and desperation to earn money by simply fooling them on the streets. Here’s a top 8 of 2018 [check out top 10 China scams in 2015 here].

With the rapidly increasing number of online transactions in China, the persisting problem of counterfeit money scams in China may now be less of a problem than it was before. But other scams are on the rise.

Although people are now less vulnerable to scams involving cash money, services as WeChat wallet and Alipay are also not without peril. Over the years, scammers have developed numerous ways to cheat people and steal money from WeChat or Alipay wallets.

From infecting smartphones with viruses, to letting people “voluntarily” hand over their personal information, scammers have found ways to trick people from all ages and all layers of society.

As a follow-up to an earlier top 10 we did on scams in China, What’s on Weibo has compiled a list of 8 scams that are recently trending on social media or in the Chinese newspapers.

 

#1 WeChat Scams: Hacking Accounts

 

With over 800 million users of WeChat Pay in China, WeChat users are a lucrative target for scammers. In recent years, there have been various cases of WeChat scams, in which hackers of private accounts pretend to be a friend or family member, and convince others to send them money.

Last summer, the news went viral of Chinese parents becoming a victim of scammers pretending to be their children.

Image via http://www.sohu.com/a/201988031_689129

These hackers, using the children’s accounts, told ‘their parents’ that they had to attend a special course or lecture, often held by professors from renowned universities such as Tsinghua or Beijing University. Once the scammer convinced the parent to pay for the extra curriculum activity, the scammers send the contact information of the “teachers” in charge of the event.

Once the parents added the “teachers'” to WeChat and transferred the money, the scammers continued to get parents to pay for all sorts of things such as service fees, registration fees, supply fees, etc.

In other more extreme examples, parents were asked to follow a link to complete the payment. The link installed a virus onto the parent’s phone, allowing the scammer to have full access to the victim’s WeChat wallet.

 

#2 Voice Scams: Imitation Champions

 

Another rising problem that China and many other countries are currently facing is the issue of so-called ‘voice scams.’ Often done through WeChat, scammers collect a person’s voice messages and then pretend to be this person by imitating his or her voice.

The scammers will then make a fake WeChat account that is an exact copy of the one they are imitating. They will contact family members and friends of the person they are imitating, and ask to borrow money. Because the voices sound so much alike, they often win the trust of people and get them to send the money.

Image via http://www.sohu.com/a/201988031_689129

In one extreme case, a young man’s voice was imitated so well that scammers were able to convince the man’s mother that her son was abducted. In a complete panic, the mother transferred the demanded ransom.

In all cases, the police advise people to always confirm face-to-face with the other person before sending money. Additionally, they also warn people should be on their guard sharing voice messages or any other form of personal information with strangers.

 

#3 Delivery Scams: Too Many Packages

 

As easy and convenient online shopping might seem, it is not without danger. Just as with WeChat scams, there are many ways in which scammers will try to find weak points within the system.

One of the issues that makes people more vulnerable to scams within the world of online shopping is that many people order so many products online, that they are more likely to believe that a package is theirs – even if they have never actually ordered it.

The most common online shopping scam involves “cash on delivery,” where the courier asks people to pay upon delivery. Once opening the packaging, people discover their package is actually empty.

In another version, scammers will first call the victim pretending to be their neighbor. They will ask them to do them a favor and accept a package, since they are not able to be home on time to accept it themselves. This way, people are even more likely to accept the package.

In yet another scam, often referred to as the “compensation scam,” scammers call customers and pretend to be employees of a delivery company. On the phone, they will tell that one of their carriers accidentally lost or damaged the ordered product and that they want to compensate for the loss. The only thing the victim has to do is to fill out an online “compensation form” for which personal information and bank information is required. With this information, the scammers can easily break into their victim’s bank account.

In some cases, scammers ask customers to add a WeChat account so they can be compensated for their ‘loss’. In the final step, they will require them to scan a QR-code, or click a link, and to transfer a small ‘service’ fee. Once they have transferred the fee, a virus will be installed on their phone, allowing the scammers to access their WeChat wallet.

Delivery companies advise their customers not to accept any package if they are not sure they have actually ordered it. With cash delivery packages, customers are advised to always check the package before sending the courier away.

About lost or damaged packages: delivery companies will never ask you to fill out a compensation form or share any personal or bank information. In case the delivery company loses or damages your order, the company you bought it from will then inform you and transfer the money back to your bank account.

 

#4 Catching Red Envelopes

 

Snatching ‘red envelopes’, qiǎng hóngbāo (抢红包) in Chinese, originated from China’s long-standing tradition of giving red envelopes to children to celebrate the Chinese New Year.

However, as the tradition of giving red envelopes is transforming from offline to online, the new phenomenon of ‘snatching red envelopes’ has also become more ubiquitous.

Through WeChat, people can send red envelopes to a group of friends: the (few) people who are first in opening that envelope will then receive an amount of money. Companies often use this feature as a marketing tool.

Scammers also make use of this red envelope craze. The ‘red envelop scam’ starts with a message via one of one’s WeChat contacts, reading something like: “I just discovered a group and the host of the group is going crazy! He keeps sending red envelopes! Add yourself to the group and snatch some envelopes.” This message will often be followed by a message telling you that you will be rewarded money when you add more people to the group.

Image via http://www.tanmizhi.com/html/4445.html

Within a few minutes, the group chat has added hundreds of people. As members increase, the group owner will encourage people to add more people to the group by keeping on sending red envelopes. In the meantime, the group owner will send out a message saying that the ones who already opened an envelope are registered. In case they do not add ten people to the group within 30 minutes they will be kicked out. As for those who add 20 people to the group within half an hour, they will be rewarded even more money.

This way, people will keep adding contacts to the group. And because it is not allowed to talk in the group, people are also not able to warn each other of its potential dangers, because, at this point, the red envelopes will actually change into QR codes – the group owner will post a message saying that his transactions surpassed the transactions limit of the day and that if people want to continue receiving money, they will have to scan the QR-code and pay the symbolic amount of one yuan ($0.14). If they do so, they are promised to be rewarded with a high amount of money.

Once these people pay the one yuan, they have been scammed: through the QR code, the scammers have installed a virus into their WeChat, allowing them to empty their WeChat wallet. There are many versions to this kind of “red envelope” and “free money” scams. To avoid being scammed, it is best to remember that there is no such thing as getting money for nothing – there’s always a price to be paid.

 

#5 Winning Lottery-Ticket Scam

 

For the “winning lottery ticket scam,” scammers play with people’s minds. And no matter how simple this trick may seem, it is a worldwide phenomenon.

The scam starts with the victim finding a lottery ticket that has intentionally been placed somewhere. Since the owner of the lottery ticket is nowhere to be found, most people finding the ticket then call the number registered on the ticket to find out whether or not the ticket won a price. And, of course, they are told that the found ticket is indeed a ‘prize-winning’ ticket.

Because people, at this point, are so excited about their unexpected ‘luck’, they often no longer keep their mind straight. The scammer on the phone will inform the lucky finder that they only need to pay a handling fee before they can receive their prize money.

In some cases, the scammers even convince the victim to pay an income tax before receiving the prize money. Once the lucky winner paid the handling fee or income tax [via WeChat or Alipay], the connection will be cut off, and of course, the victim will never get the prize.

 

#6 Found Wallet Scam

 

You are walking outside, and suddenly you find a wallet on the streets – the owner is already out of sight. As you stand still with the wallet in your hand, a stranger comes up to you accusing you of stealing money from that found wallet.

It is a scam that frequently occurs in China, and it is easy to imagine that someone who just found a wallet might feel awkward about the situation, especially when accused of trying to steal the money inside of the wallet.

While explaining that they did not intend on trying to steal money, the stranger will intimidate the finder to give him some of the cash inside to settle the matter. Many people will do so in order to avoid a public scene.

But that is not the end of the scam, as the ‘owner’ of the wallet will then suddenly pop up, asking for his wallet, and discovering that some money inside is missing. The ‘finder’ will then compensate for that loss to get themselves out of the humiliating situation.

Obviously, the two men – the ‘bad guy’ demanding the money and the person who lost the wallet – work together in setting people up like this. Police advise people who find a wallet to turn it in at the closest police station.

Netease has reconstructed the scam on a video here.

 

#7 Fake Job Scam

 

One of the most common scams in China nowadays is the so-called “fake job scam.” Scammers will place fake job ads, and meet responders outside a company office for their ‘job interview.’

In most cases, the applicant is ‘hired’ immediately after the job interview. But before they can get to work, they first have to pass a medical test at a designated ‘research center.’ The victim is then told that he has to pay for the transportation and medical fees, and that the money will be reimbursed at the end of the first working month.

In many cases, victims also pay for service costs and forward a deposit for cards that allow them into the office, etc. When all these fees are paid, the ‘company’ can no longer be contacted and is suddenly untraceable.

To avoid people from getting tricked into these fake job scams, police advise to only reply to job ads with a registered phone number and official company address.

 

#8 Trap Loans: A Mountain of Loans

 

The problem of ‘trap loans’ has received much media attention in China over recent years. Earlier this year the story of one woman went viral; she borrowed 2,000 yuan ($292) and ended up with a 150,000 yuan ($21.872) debt two months later.

She is just of among many victims of China’s “trap loans.” In various other cases reported by the media, people end up in such huge debts and depression, that they take their own lives.

Scammers specifically target people who are temporarily short of cash. It often starts with an individual lender offering a quick loan, only for a few days, in the name of a small loaning company (小额贷款公司). Once the person tells the loaning company they need credit, a lender will come up with a contract that has blank spaces in them. The contract is often so long and complicated that people don’t read it through carefully enough.

When the contract is signed, the loaning company will insert extra information into the blank spaces of the signed contract. They will, for example, change the time you are allowed to borrow money, the interest rate, or the name of the lender.

In the next phase, the loaning company will purposely make the borrower breach the contract by, for example, temporarily being out of service or unreachable, so that the borrower is not able to pay off his debts as recorded in the agreement. They will then face the sum of accumulated interest on the borrowed money, and fines for overdue payments.

Around this time, the lender will introduce the borrowers to another loaning company where they can take out more loans to pay off the debts of the first contract. This can go on for many years and many contracts. The borrower will not be able to repay the entire sum of borrowed money, so keeps on paying huge interest rates and fines for overdue payments.

There have been reports of trap loans in various forms such as campus loans, where students are tricked into ‘easy money loans’ by on-campus advertisements; or naked loans, where scammers demand people to send a (partly) nude picture of themselves holding their ID as collateral. Often this photo will later be used to blackmail a person.

Want to read more? Also check out our previous ‘Top 10 Scams to Watch Out For in China‘.

By Gabi Verberg

Spotted a mistake or want to add something? Please let us know in comments below or email us.

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What’s on Weibo provides social, cultural & historical insights into an ever-changing China. What’s on Weibo sheds light on China’s digital media landscape and brings the story behind the hashtag. This independent news site is managed by sinologist Manya Koetse. Contact info@whatsonweibo.com. ©2014-2018

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