What To Do if You Are a Victim of a Financial Scam

A variety of scams have frequently occurred in the Chinese community in recent years. The scammers are typically Chinese immigrants, while the target is often Chinese in the United States who are not proficient in English or who easily trust their compatriots. Some scams result in victims suffering losses of up to tens of millions of dollars, causing significant physical and psychological harm to the victims. The nature of the Internet and platforms like WeChat has made these scams even more insidious, making it increasingly difficult for law enforcement agencies to investigate them.

Based on recent warnings issued by the Chinese Embassy in the U.S. to Chinese citizens and related news reports, Documented has compiled a list of scams that have been highly prevalent in the Chinese community and resources for victims to help the Chinese community become more vigilant and avoid unnecessary losses.

Also Read: NYC’s Chinese Community Organizes to Hold Chase Bank Accountable for Identity Theft

Cryptocurrency investment

Many Chinese immigrants have recently received random text messages from strangers. Some of these messages address them as “old classmates” or “old friends,” while others pretend to seek help or ask questions. Although some recipients choose to ignore these messages, scammers usually use various tricks to lure you into replying, such as sending messages like, “Are you busy? Why haven’t you replied?” They continue to engage in conversation even if informed that they have reached the wrong person. These schemes, where a scammer gains trust of a target before stealing from them, are also known as “pig butchering”.

Also Read: Food Stamp Thefts Hit Sunset Park Chinese Community

The scammer may then attempt to add you as their friend on WeChat or other social platforms after rounds of conversations. Once added, the scammers reveal lucrative cryptocurrency investment opportunities, enticing you to invest. After an initial investment, the scammer will allow you to see the high returns in your account, so that you will further increase the investment. Later on, the investment platform will show that it is impossible to withdraw cash and warn you that the transaction involves money laundering, demanding a separate deposit for cash withdrawal. But even after making the deposit, you are still unable to withdraw money, and eventually realize this is a scam.

Click farming

In some instances, Chinese immigrants are introduced by friends or relatives to join WeChat groups known as “click farming groups.” The owners of these groups claim to be running businesses through WeChat and request the assistance of group members to purchase products and boost store sales. In return, the group owners promise that other than the regular shipment to the buyer, they will also refund the money paid and provide additional cash returns. Tempted by the prospects, the buyers buy a batch of products. But they often will not receive the payment and cash returns as promised. When the buyers ask about the situation, the group owners will at first brush them off before kicking them out of the chat. The buyers only then realized that they had been deceived.

Also Read: Millions Stolen from Chinese Immigrants in HomeX Ponzi Scheme

Deposit fee shopping Ponzi scheme

Similar to click farming, some Chinese immigrants are introduced by their friends or relatives to join “deposit fee shopping” WeChat groups. In this case, the group owners tell the buyers that by paying a “deposit fee” several times higher than the actual price of the goods purchased, they can obtain the goods for free or at a significantly reduced price. Furthermore, they are promised a full refund of the deposit within one to three months. The goods purchased are purported to compensate for the investment made as the deposit fee. However, buyers will ultimately find that they neither received the goods nor the deposit refund. 

Private exchange of foreign currency

Some Chinese immigrants come across posts on WeChat or other platforms where people express their interest in privately exchanging currency. After adding these individuals as friends, they pay the scammers in Chinese Renminbi in exchange for U.S. dollars, only to find themselves immediately blocked by the scammers. New York also saw a number of cases of people carrying cash to the designated location to exchange for currency who were robbed by the scammers.

Consulate phone scam

Certain scammers impersonate the Chinese consulate or law enforcement officials to inform you that your personal information has been leaked or that you have been involved in criminal activities. They do this to lure you into providing personal information or transferring money. Many overseas Chinese immigrants have been victims of this type of scam. 

Also Read: 20 Brooklyn Chinese Families Face Eviction Due to $4 Million Housing Fraud

How to prevent and identify scams

The Chinese Embassy in the U.S. has warned its citizens to heighten their awareness of fraud and rationally identify various types of scams. The Embassy advises caution when adding strangers as WeChat friends, joining WeChat groups, and transferring money to ensure personal safety. If you experienced a scam, please report it to the local police.

The consular assistance and protection telephone number of the Chinese Embassy in the U.S. is often only used to answer urgent calls from Chinese citizens. There will be no active outbound dialing under normal circumstances, let alone so-called money transfer services.

The Chinese Embassy in the U.S. is not a law enforcement agency. It will not notify you to handle any case, ask for your personal information or money or request you to make bank transfers.

Avoid disclosing your name, date of birth, passport number, bank card number, home address and other personal information to strangers on the phone. If you receive a suspected scam call, hang up immediately or verify the caller’s identity through multiple means. If they request money transactions, do not transfer money directly.

Resources for victims of scams

If you have experienced fraud, you can refer to the following to report the case:

Call 911 or local police stations and report the case to the local precinct in the U.S. If you are an international student, report it to the police in your school.

If the stolen funds are withdrawn through a Chinese mainland bank transfer, after reporting the case to the U.S. police, you may directly call 110 and report the incident to the police department responsible for the district where the bank is located or where your household registration is based. Provide them with a detailed explanation of your situation and provide the bank account number involved in the case.

Criminals often instruct victims to remit money to financial institutions in the Hong Kong and Macao Special Administrative Regions to circumvent the law enforcement in mainland China. In addition to reporting the case to the U.S. police, you can report it to the relevant department of the special administrative regions of China:

In addition to reporting the case to the police in the U.S., victims who have encountered fraud can also report the case and seek assistance using the following methods:

For most fraud, contact the Federal Trade Commission or uses its Online Complaint Assistant to file a report

For scams that impersonate the IRS to collect taxes, contact the Treasury Inspector General for Tax Administration or call 1-800-366-4484 to file a report

For identity theft, report to the IdentityTheft.gov

For internet fraud, report to the FBI Internet Crime Complaint Center

For cross-border e-commerce fraud, report to the econsumer.gov. For other commercial fraud activities, report to the Department of Commerce’s International Trade Administration

For fraud involving violations of immigration laws, report to the U.S. Immigration and Customs Enforcement

For investment fraud, report to the Securities and Exchange Commission or the securities regulator department in your state

For fraud involving credit, loans and remittance, report to the Consumer Financial Protection Bureau

For telephone scams, report to the Federal Communications Commission.

You can visit Stopfraud.gov to find out which department to report bank, credit card, housing and other financial fraud.

Chinese Ministry of Foreign Affairs Global Emergency Call Center for Consular Protection and Services (24 hours): +86-10-12308 or +86-10-59913991

Consular Protection and Assistance Hotline of the Chinese Embassy and Consulates in the United States:

Chinese Embassy in the U.S.: +1-202-4952216

Chinese Consulate-General in New York: +1-212-6953125

Chinese Consulate-General in San Francisco: +1-415-9296998

Chinese Consulate-General in Los Angeles: +1-213-8078052

Chinese Consulate-General in Chicago: +1-312-7800170