A wildfire of transnational Internet fraud is sweeping across the world, causing growing financial losses for many countries. Following the world’s first Global Fraud Summit in the UK last month, the Taiwan-based Global Cooperation and Training Framework invited delegates from the UK, the US, Australia and other states to take part in its 2024 International Workshop on Combating Transnational Fraud from Monday to Wednesday last week in Taipei.
Hopefully, this workshop can contribute to expanding countries’ ability to fight fraud and achieving the vision of multilateral cooperation to combat it.
Data provided by British representatives at the workshop showed that the majority of fraud cases in the UK originated abroad and 80 percent of them were perpetrated via the Internet. As a result, 70 percent of money stolen through fraud flows abroad, which has had a serious impact on the UK’s economy. To address the problem, the UK on Oct. 26 last year promulgated the Online Safety Act to control online activity, while at the same time bolstering oversight of financial and corporate entities by requiring banks’ and companies’ supervisory departments to fulfill their responsibility to safeguard and manage their customers.
Among the four aspects from which Taiwan wages its war against fraud, cooperation between police and the financial sector has seen the most impressive results. Last year, their joint efforts blocked NT$8.99 billion (US$280 million) in fraud-related money transfers. However, amid this global wave of fraud, NT$8.8 billion was still lost to scammers.
Like the UK and other states, Taiwan has to contend with the difficulty of supervising the Internet and social media. At the start of this year, Taiwanese police, through cross-border cooperation with their US counterparts, cracked a fraud syndicate controlled by the Mingren Society — a faction of the Bamboo Union gang. An analysis of this case showed that fraud syndicates in Taiwan start by setting up bogus companies that pretend to offer investment services in securities and virtual currencies. Next, the syndicates use their criminal associates who work in advertising firms to use those companies’ accounts to place online adverts on platforms such as Facebook and YouTube.
Gang members then concoct scam sales pitches. The syndicates hire technicians such as computer programmers to design Web sites, apps and investment frameworks modeled on the original frameworks of systems integrators.
Finally, they use US domain names to set up investment Web sites that are hard to detect because they are overseas. Their mode of operation is quite similar to the criminal structures described by the UK, the US and other governments.
Judging from the exchanges that took place at the workshop, it is clear that fraud syndicates are riding the digital wave by making widespread use of social media and network technology. They hide behind their keyboards and might even take advantage of the difficulty of cross-border cooperation to cut off counter-fraud operations by going abroad and hiding in other countries. Internet fraud has thus become a low-risk, high-profit new model of global crime for which the culprits risk only relatively light prison sentences.
Internet fraud has become an important issue that is also one of the most difficult for countries to regulate. Judging by the experiences of regulation and governance shared by countries at the workshop, it is apparent that to effectively control fraud, a framework of Internet-related laws and management must first be established. Beyond that, it is necessary to strengthen supervision of the financial sector and business corporations, while also establishing transnational cooperation. Only through the synergistic effect of these measures is it possible to effectively combat fraud.
The fight against fraud is a global one. British statistics showed that more than 30 countries have adjusted their corporate law to include the registration and supervisory requirements that are needed to strengthen the fight against fraudulent activities. They have also taken the equally important step of enacting online safety laws.
Taiwan can draw on the UK’s experience in fighting fraud by enacting digital network management laws and bolstering supervision of corporate law. Only through the effective supervision of the business sector can it have the necessary intelligence and information to exchange with other countries, strengthening the transnational fight against fraud.
Lin Shu-li holds a doctorate from Central Police University.
Translated by Julian Clegg
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