Tuesday, 06 September 2016 23:47

Personal-Privacy Concerns Grip China


Chinese internet users have long been plagued by fraud and scams. Now national outrage over reports of a phone swindle is focusing new attention on lax privacy protections.

The scandal involves a recent high-school graduate in the eastern province of Shandong who was allegedly tricked, over the phone, into transferring the money her family had saved for her college tuition into the account of someone apparently claiming to be a local education official, according to Chinese media reports.

After she realized she had sent the 9,900 yuan ($1,480) to people she believed to be fraudsters, and filed a report with the police in the city of Linyi, her heart stopped beating and she later died in a hospital, according to the state-run Xinhua News Agency.

The police have arrested six suspects, whom the police say pretended to be education officials offering financial aid. But the police didn’t say how the suspects might have obtained personal information including her name and phone number, or learned of her need for financial assistance. Media reports have speculated that someone hacked into the school or the local education department’s computer system, or paid for stolen information. The local education department has declined to comment to Chinese media outlets.

It couldn’t be confirmed whether authorities believe her death was directly caused by the scam. The young woman’s family couldn’t be reached for comment.

But the Chinese media, and many internet users, have seized on reports of the tragedy, in part because so many users themselves have encountered similar schemes.


Technology has given new tools to thieves world-wide. In China, security experts and lawyers say the sheer number of personal-data-theft cases in a society that traditionally doesn’t value privacy makes personal-information protection a serious challenge. And, as online users become more sophisticated about their privacy and rights, they are demanding, often via social media, better protection.

The size of China’s online population, with roughly 700 million users, makes it an attractive target. A national survey from the Internet Society of China, a semiofficial industry association, found that last year 76% of Chinese users had received fraudulent information from sources purporting to be banks, internet companies or television stations offering prizes. Some 55% reported receiving scam calls pretending to be from public-security, health or other government agencies. About one-third said they had lost money after receiving such calls, text messages or emails in 2015, the survey found.

A more recent survey, this one on Weibo, a Twitter-like social-media platform, asked users why scams are widespread. Of 6,077 people who had voted as of Monday, 55% said it is because the entities that collect personal information fail to protect it properly, and 36% blamed the police for failing to combat fraud effectively.

“There’s a heightening awareness in China about the need to protect privacy and an increasing outrage about what can happen when privacy is violated,” says Manuel E. Maisog, a partner at law firm Hunton & Williams LLP’s Beijing office.

Over the past year, the Chinese government has intensified its crackdown on internet fraud and established a nationwide campaign against the theft of personal data.

‘There’s a heightening awareness in China about the need to protect privacy and an increasing outrage about what can happen when privacy is violated.’
—Manuel E. Maisog, partner, Hunton & Williams law firm
Data leaks and breaches can happen anywhere and in many ways. In recent years, companies including Target, Home Depot and Japan Airlines have had serious data incidents. Some servers of Ctrip.com International, China’s largest online travel company, were hacked last year, causing disruptions to its website and mobile app services. The company said its customer-reservation data remained intact.



Like the U.S., China has no unified national privacy law, but China has at least 40 laws regarding personal-data protection, according Shu Hai, a partner at Zhong Lun Law Firm’s Shanghai office.

The big problem is a lack of enforcement, security and legal experts say. “Most businesses and organizations don’t spend much on personal-information protection because it’s very cheap to break the law and very expensive to comply with regulations,” says Mr. Shu.

China’s highest court, as well as its top prosecutors and police authorities, called the trading of stolen personal data “a huge underground industry” as early as 2013, Mr. Shu says. Yet, he adds, the number of cases that are prosecuted and result in convictions makes up a tiny fraction of the total offenses. And he says that penalties are often light, ranging from orders to correct a violation to fines of a couple thousand dollars.

A look at OpenLaw.cn, an open-source database of court verdicts in China, found that data leaks often stem from employees of the police, banks, schools, corporations and small businesses.

Mr. Shu says it is difficult to deter future crimes because many violators serve little jail time and pay small fines.

In Shandong, where the high-school graduate was from, the police department said last Saturday that it will crack down on telecommunications scams, according to the Xinhua News Agency. Complaints determined to have merit after initial investigations will be treated as criminal cases, according to the Xinhua report.

Source : http://www.wsj.com/articles/personal-privacy-concerns-grip-china-1472665341

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