On July 29, the National Audit Office announced the central government’s final account for last year. The report included the statement that the reach rate of public information cannot be the sole indicator of how well the government’s fraud awareness efforts are working. The government’s fraud awareness campaign is indeed in full swing and its reach grew from 15 million views in 2022 to 330 million views last year.
The National Police Agency’s Criminal Investigation Bureau (CIB) has also strengthened its anti-fraud efforts.
The number of cases solved by the police continues to hit new highs, as does the number of arrests. Wave after wave of anti-fraud projects are overwhelming the on and offsite staff of the agency.
Nonetheless, the volume of fraud still reached a new high last year.
The number of defraudments reached 37,000 and the total amount of money defrauded also reached a new high of NT$8.878 billion (US$273.51 million).
These figures do not include cases in which the fraud intelligence analysis team and undercover teams established by the CIB go out and intervene to open potential victims’ eyes and persuade them not to remit money, yet they still refuse to stop remitting.
Even after being notified by the police, 30 percent of fraud victims refuse to report the crime.
What makes fraud so alluring? Why can people who have been tricked still not have their eyes opened? This problem has become a nightmare that the CIB cannot handle on its own.
The government’s spending on fraud awareness publicity campaigns last year had an annual budget of NT$2.53 million and an additional secondary reserve fund of NT$40 million, for a total of NT$42.53 million spent on fraud awareness campaigns. However, a fraudulent advertising syndicate detected by the CIB’s Fourth Investigation Corps spent NT$250 million on fraudulent ads in just a year and a half.
Evidently, the government’s spending on anti-fraud advertising would never keep up with the fraud syndicates. From January last year to July this year, the CIB ordered Internet platforms to take down 140,000 fake advertisements, of which more than 90 percent were videos on Facebook and Google’s YouTube.
A fake advertisement remains on the Internet for about 2 to 3 days, but it only needs to deceive one or two people each day to pay for itself.
Still more serious is the explosive growth of fake videos produced using artificial intelligence (AI) over the past month. Famous figures from the financial world have been impersonated, as have well-known entrepreneurs and companies.
This is no longer just a question of the battle between fraudulent and anti-fraud advertisements as to how many people they can reach.
The advertisements of the past could not grow into such a huge volume of fake advertisements; as soon as they appeared, they would immediately be banned and those responsible would be punished.
The current situation indicates that there is no system for reviewing online fake advertisements, and no administrative system for monitoring and punishing those who place them. As a result, online fake advertising has spun completely out of control.
Every fraud syndicate is rushing to place fake advertisements on the Internet, and it is hard to take down every fake ad.
It appears that fake online ads are now the main source of Internet fraud. It is fair to say that the total loss of control over online advertising is the biggest loophole in the government’s anti-fraud management.
While not taking the reach rate of government advertising as the sole indicator of fraud awareness, the nation faces an unending and increasing stream of fake advertisements, not to mention the online proliferation of fake companies, fake registration certificates and fake investment licenses.
Even legally registered companies are being impersonated online by bogus investment companies.
To stem fraud, the government first needs to stop the bleeding. They must start with the management of fake online advertising. Digital trust should be promoted as the most important defensive weapon in the coming age of AI Internet.
If the government just counts on the police’s anti-fraud campaigns to solve the problem, hoping that it reaches enough people, it would undoubtedly be a mere drop in the bucket that can hardly put out the wildfires of online fraud.
The “four anti-fraud laws” enacted last month, including the as yet untranslated “fraud crime hazard prevention act” (詐欺犯罪危害防制條例) plus amendments to three existing laws, authorize the authorities that oversee target industries to take more effective action.
Newly-appointed Minister of Digital Affairs Huang Yen-nun (黃彥男) said that he would shoulder this responsibility and begin by “shooting three arrows” to combat fraud.
The authorization of laws, regulations and orders would be the key to solving the problem of fake advertisements.
Using the full authorization provided by these new laws would provide the government with sufficient regulatory support to control fake advertisements on the Internet.
Under the Cabinet’s leadership, by integrating cross-departmental resources and combining public and private efforts, Taiwan can become a global leader in the fight against fraud.
Samuel Lin is a police officer.
Translated by Julian Clegg
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