Hong Kong police have cut off an alleged Malaysian phone scam gang in the city for the first time in their history

“Police believe that this transnational criminal group has successfully committed more than 400 similar phone frauds since April this year, totalling more than HK$61 million,” said Chief Inspector Dicken Ko Tik of the police’s Cyber ​​Security and Technology Crime Bureau.

“This is also the first time that police have discovered that a criminal organization from abroad has established bases in Hong Kong.”

According to police, the international gang sent members to the city who used fake IDs to buy and register Hong Kong phone cards, then set up bases to manage large numbers of phone numbers.

The measure allowed overseas members to commit phone scams against Hong Kong residents by posing as customer service representatives from legitimate companies.

Police launched an investigation after receiving reports of criminals using fake IDs to register prepaid phone cards online.

Officers discovered that three Malaysian men had used computer software to alter details on Hong Kong passports and identity cards between May and August, before registering at least 300 prepaid phone cards online.

According to officers, the gang used the calling cards to carry out phone scams, posing as customer service agents who claimed to collect deposits to help victims cancel paid services.

According to police, the group had placed modem pool devices in various locations around the city to convert traditional phone signals into online signals, allowing criminals abroad to use phone cards inserted into the modem pool devices to commit fraud.

During the operation, officers seized 87 modem pool devices, 15 computers and more than 80,000 prepaid phone cards.

According to police, the arrested Malaysian men had come to Hong Kong as tourists and earned around HK$10,000 to HK$16,000 a month from the scam.

The gang also recruited Hong Kong residents to help operate the platform. The five Hong Kong residents arrested in the case were found to have mainly provided prepaid phone cards and city ID documents for real-name registration.

They also transported materials, rented equipment and provided bank accounts to accept dirty money.

According to police, officers contacted more than 1,000 people who had received calls using the calling cards identified in the investigation, and were able to stop 17 of them from sending money to the fraudsters.

“Due to the large number of phone cards, the police investigation is still ongoing,” said Chief Inspector Lee Chun-man. “We hope to prevent more residents from being deceived.”

The Telecommunications (SIM Card) Regulation, which came into effect in September 2021, required phone users to complete a real-name SIM card registration with their telecommunications provider.

People who did not register their SIM card before the deadline of February 23 last year lost their subscription.

The police said that in 2022, the police, together with the Office of the Communications Authority and telecommunications service providers, have set up a task force to regularly review the real name registration program.

“Preventing these cases offers us good opportunities to review and optimize the existing system,” says Ko.

Police figures show that the number of cases of fraud rose by 6.2 percent in the first half of the year compared to the same period in 2023.

The 19,897 recorded cases represent more than 40 percent of crimes during the period and totalled HK$4.48 billion.

Police previously indicated that fraudsters’ methods have evolved over time and that there has been an increase in the number of criminals posing as customer service representatives for online stores, online payment platforms and telecommunications companies.

Police recorded 1,605 cases of this type of fraud in the first half of the year, with 1,111 reported in July alone.