Hong Kong police have busted a suspected Malaysian phone scam gang based in the city, a first for the force

“Police believe that this transnational criminal group has successfully carried out more than 400 similar phone scams since April this year, involving a total amount of more than HK$61 million,” said Superintendent Dicken Ko Tik of the police’s Cybersecurity and Technology Crime Bureau.

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

Police said the international gang sent members to the city who used fake ID documents to buy and register Hong Kong phone cards before setting up bases to exploit large quantities of phone numbers.

The move allowed foreign members to conduct telephone scams on Hong Kong residents by posing as customer service employees of legitimate companies.

Police have launched an investigation after receiving reports that criminals were using fake ID documents to register prepaid phone cards online.

Police discovered that three Malaysians used computer software to change information on their passports and Hong Kong identity cards between May and August before registering at least 300 prepaid phone cards online.

Officers said the gang used the phone cards for telephone scams by posing as customer service employees who claimed to be collecting deposits to help victims cancel paid services.

Police said the group installed modem pool devices at bases across the city to convert traditional telephone signals into online signals to allow foreign criminals to use phone cards inserted into the modem pool devices to commit fraud.

During the operation, agents seized 87 modems, 15 computers and more than 80,000 prepaid telephone cards.

Police said the arrested Malaysians came to Hong Kong as tourists and earned between HK$10,000 and HK$16,000 a month from the scam.

The gang also recruited Hong Kongers to help operate the platform. The five Hong Kongers arrested in the case mainly provided the city's prepaid phone cards and identity documents for registering their real names.

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

Police said officers contacted more than 1,000 people who received calls from the phone 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 involved, the police investigation is still ongoing,” said Chief Inspector Lee Chun-man. “We hope to prevent other residents from being deceived.”

The Telecommunications (SIM Card Registration) Regulations, which came into force in September 2021, require phone users to complete real name registration for SIM cards with their telecommunications service providers.

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

Police said they had established a working group with the Office of the Communications Authority and telecommunications service providers in 2022 to regularly review the real-name registration program.

“The emergence of these cases provides us with good opportunities to review and optimize the existing system,” Ko said.

In response to inquiries from the Post, the Office of the Communications Authority said that as of the end of July, about 2.8 million prepaid phone cards had been rejected for registration because customers had not provided the required information.

The real-name registration of about 2.45 million phone cards was also cancelled by telecommunications service providers due to non-compliant registration records.

Police figures show that the number of cases of deception increased by 6.2% in the first half of the year compared to the same period in 2023.

The 19,897 recorded cases account for more than 40% of the crimes committed during the period and involve a total amount of HK$4.48 billion.

Police had earlier said that the scammers' methods had evolved over time and there had been an increase in the number of criminals posing as customer service employees of online shopping sites, online payment platforms and telecommunications companies.

Police recorded 1,605 cases of such deception in the first half of the year, with another 1,111 reported in July alone.