Taiwan’s frontline fight against cell phone fraud

jeff kuo

Jeff Kuo Says Fighting Telecom Fraud ‘Never Ends’

Telecom security chief Jeff Kuo says tackling cellphone fraud is an ongoing battle and that Taiwan is at the forefront.

“It’s like a miniature of the world here in Taiwan, where we can anticipate all kinds of fraud,” says Mr. Kuo. “We can use this knowledge to protect other countries because we see what will happen first.”

Mr. Kuo is the head of the Taiwanese company Gogolook, which owns Whoscall, one of the most popular spam-blocking apps on the island and in all of East Asia in general.

It says its artificial intelligence-based software is constantly trawling through more than 1.6 billion phone numbers, both Taiwanese and those from across Asia and other parts of the world, to block messages and calls from likely scammers.

A person using the Whoscall app

Gogolook works with Taiwan anti-fraud officials

Working with the Taiwan Criminal Investigation Bureau’s (CIB) 195 Anti-Fraud Program, Whoscall blocked more than 122 million fraudulent messages last year in Taiwan alone.

But why is Taiwan such a hotbed for telecom fraud? Mr Kuo says the island’s small population of 23.5 million makes it a perfect “training ground” for organized criminals, both Taiwanese gangs and those from mainland China and elsewhere. They’re trying out a new phone scam in Taiwan, and if it works there, they can expand it to Asia and then globally.

“[For example]we’re going to give Apple a lot of evidence…until they realize there’s a serious problem,” says Kuo-san. “Don’t worry, it’ll be in Europe and the US very soon.”

Jean Hsiao Ya-yun, CIB telecoms fraud investigator, told the BBC that another reason why so many new scams originate from the island is the fact that Taiwan is one of Asia’s leading producers of high-tech technology. She says this level of technical expertise is shared by Taiwanese scammers.

Ms Hsiao adds that the coronavirus pandemic has been a boom time for scammers, with millions of people stuck at home and therefore more reliant on their phones.

“And the Taiwanese stock market was very high at the time, so a lot of people were making a lot of money,” she says, adding that this has led to a large increase in investment fraud.

“Cheaters would [for example] Giving advice on app pages or they would start a chat group where they say they can tell you when a stock is going to go up and they can share that information if you join their group.

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The scammers would then demand money for the information. Other such investment scams would result in people receiving phone messages from friendly strangers offering loans at very low interest rates.

Such is the scale of the criminal networks behind the scam that some Taiwanese gangs have opened operations abroad. Ms Hsiao points to a case from 2020 when 92 Taiwanese were arrested in Montenegro.

In other cases, Taiwanese are lured overseas to countries like Cambodia under false promises of high wages. There they have to work against their will as telephone scammers, as the BBC reported in September.

Mr. Kuo admits there is a “arms race” between anti-fraud firms like his and the scammers. And while Whoscall and similar apps block millions of messages and phone calls, some still get through.

Anyone who has lived in Taiwan, regardless of age or nationality, knows of a method used by scammers – burst dialing. When you answer an unfamiliar number, you hear a short dial tone, and then a pre-recorded message begins to play.

These calls are made by automatic dialers that can make hundreds per minute. It’s an effective way for scammers to find the work numbers of people who are willing to answer the phone, even though they don’t know who is calling them.

Apple smartphones

Gogolook warns the US giant Apple of new phone scams

Taiwanese cybersecurity expert TonTon Huang says once such a person is found, scammers call back.

“If [they find] If someone uses the number, they’ll sell the active phone data or tell you to pay off a loan, make an insurance payment, or transfer money,” he says. “The most common seems to be installment payments. They’ve bought online and need to pay in installments or something.”

While scammers often look for older people who may not be tech-savvy or not keeping up with fraud trends, CIB’s Ms Hsiao says they still fool many young adults as well.

Earlier this year, a Taiwanese YouTuber, Edison Lin, in his 20s, posted a video on the platform in which he emotionally revealed that he had been the victim of a phone scam.

He had been cheated out of $13,000 [£12,600] through the collaboration of two scammers.

Mr Lin said it happened after he received a phone call from someone claiming to be an employee at a restaurant he had visited a few months earlier. The man told him he was accidentally overcharged by $380 and was being offered assistance to get the money back.

After Mr. Lin ended this call, he was soon called again, this time by the other scammer who was pretending to be from his bank.

“If that [fake] an employee of E.Sun Bank called, he knew the whole story, he told me how to get compensation from E.Sun,” Mr. Lin said in his video. “His professionalism made me think he was really a bank teller.

“Soon we were talking back and forth for half an hour… and I noticed one of them switched [my] Money… I still haven’t paid off the debt.”

Prof. Sandra Wachter, Senior Research Fellow for AI at the University of Oxford, is a global expert in the use of AI software systems.

She says that AI can be a powerful tool in deterring telecom and other technology-based scams, but that the general public also needs to be better educated on the risks.

Prof. Sandra Waechter

According to Prof. Wachter, technology can only do a limited amount to protect people from fraud

“Technology is used to expand fraud attempts…it allows fraudsters to cast a wider net and work more efficiently,” she says. “At the same time, some people might be more gullible and prone to deception because texting or calling seems legitimate, especially when done in a persuasive and sophisticated way.

“As fraud continues to grow, the strategy to combat these attempts must be too big, and so it makes sense to use AI software for this purpose.

“The question is how effective are these attempts and will we be able to stop this behavior completely?” And the answer is: probably not, but we can temporarily contain it. Digital literacy and education can help people avoid falling into the trap. AI can help detect and intervene in these scams.”

Jeff Kuo, back at spam-blocking app Whoscall, agrees, saying the fight against scammers “may be endless, but so is our determination to hone our skills and stand up.”