Recently in Hong Kong, there has been a dramatic increase in email scams and other online business fraud. Robertsons’ Criminal and Commercial Crime Team have been assisting many overseas clients in collating and filing complaints with the local authorities and following up police investigations.

According to the Hong Kong Police Force, technology crime has remained an operational priority of the Commissioner of Police since 2012. In 2015, the Police Force established the new Cyber Security and Technology Crime Bureau so as to allocate extra manpower to combat and prevent technology crimes. While the overall crime rate fell to a new low since the 80s, in 2014 alone there were more than 2,000 reported cases of online business fraud, and the pecuniary loss hit almost $50 million. Besides email scams, other common types of online business fraud often involve e-banking, e-auctions, e-purchases, online trading and the misuse of credit cards.

In most cases, criminals find ways to hack into the email accounts of small and medium enterprises. They will then search these accounts for sensitive information relating to financial transactions. Once a deal has been identified, the fraudster may send various fictitious emails purporting to be banks, lawyers, accountants, customers or even the senior management officers of the victim companies asking for transfers of funds into a nominated bank account, usually giving an excuse that there is a problem at the bank and an alternative account needs to be used. Where the fraudster’s account is situated in Hong Kong or where the money has moved through a, or several, bank account(s) in Hong Kong, there is jurisdiction here and Robertsons can assist.

We strongly advise companies to encourage their staff to adopt strict procedures on verification of identities and to check all email addresses carefully before sending monies on any purported instructions obtained through email. Often, fraudsters will create spoofed email addresses almost identical to a known party, the only difference being an additional letter in a name (e.g. from William to Willliam), or that the domain name of the address will be changed (i.e. from “.com” to “.net”). When these minor differences go unnoticed, or are simply ignored, a reply to such an email can set off an elaborate fraud resulting in the inadvertent transfer of monies into the fraudster’s nominated bank account.

If you suspect that you are, or have been, a victim of such fraud, time is of the essence. If a police report is made in a timely manner, there is a possibility that the fraudster’s bank account(s) can be frozen. Unfortunately, a telephone call to the police station will not suffice. Before taking steps to freeze a fraudster’s bank account, the police will first need to be satisfied that a fraud has been committed. Usually, this requires the collation of a documentary trail clearly setting out evidence of a fraud. Robertsons can respond with speed and provide assistance in this regard.

If you have any questions, please contact our Partner Mr. Kevin Steel of steel@robertsonshk.com or Partner Mr. Johnny Ho of johnny_ho@robertsonshk.com. If urgent assistance is required, please call our 24 hour emergency hotline at 9037 0333.