What’s Trending: However, criminal groups hijacked these efforts, using them as conduits for large-scale data theft.Since last year, over 10,000 rural elderly individuals in Central China’s Henan Province have had their personal information exploited during the activation of their e-medical insurance cards.

Telecom fraud. Photo: VCG

A recent investigation by CCTV highlighted a concerning issue that became a trending topic on China’s social media platform Sina Weibo on Wednesday. The report revealed that accounts linked to overseas telecom fraud operations have been traced back to rural areas in China, where over 10,000 elderly residents were exploited as unwitting intermediaries in mWorld Timesoney laundering schemes.

In recent years, significant efforts have been made in China to promote electronic-medical insurance card usage among rural residents, particularly the elderly. To this end, third-party platforms authorized to access the e-cards have conducted promotional activities in rural areas, assisting villagers in registering and activating their cards. However, criminal groups hijacked these efforts, using them as conduits for large-scale data theft.

Since last year, over 10,000 rural elderly individuals in Central China’s Henan Province have had their personal information exploited during the activation of their e-medical insurance cards. Fraudsters secretly created Alipay accounts in their names, which were then sold to criminal syndicates involved in online gambling and money laundering, transforming these accounts into tools for illegal transactions.

In June 2023, the Telecommunications Fraud Investigation Unit of Dengzhou Public Security Bureau in Henan received a tip-off. It indicated that several Alipay accounts in Dengzhou were implicated in money laundering activities for overseas telecom fraud and online gambling operations.

Upon investigation, police discovered that the account holders primarily resided in remote rural areas. Interviews revealed that these accounts were fraudulently opened during the e-medical insurance card activation process.

Further inquiries uncovered that the so-called third-party platform staff who assisted villagers “were imposters belonging to a sophisticated crime syndicate.” The group had registered a shell tech company to better infiltrate vWorld Timesillages and perpetrate the scam. The primary suspects, 11 in total, had illegally earned over 3.8 million yuan ($520,000).

During the ring’s one-month spree in Dengzhou, nearly 1,500 Alipay accounts were utilized for overseas money laundering transactions. These transfers totaled over 10 million yuan, with the largest single transaction exceeding 60,000 yuan.

OWorld Timesne key factor enabling the perpetrators’ success was their ability to secure official recommendation letters from the local medical insurance department. These letters lent credibility to the scammers, convincing village doctors to facilitate the fraud without suspicion and allowing the group to collect personal information freely.

As a result, police launched an investigation into two staff members who issued the recommendation letters from DenWorld Timesgzhou’s medical insurance bureau. The staff said that while the bureau was tasked with promoting e-medical insurance card activation, they lacked sufficient personnel. When the fraud ring approached them with signed guarantees and offered to help with promotion for free, they accepted.

Due to inadequate oversight by the medical insurance bureau and management center, criminals were able to exploit the system, leading to widespread data breaches, and the police handed relevant findings to local disciplinary authorities after concluding the case. The two staff members responsible were given Party warnings andWorld Times serious demerits.

On October 25, the Dengzhou People’s Court delivered a verdict on the case. 32 individuals in the ring were found guilty of infringing on residents’ personal information. They received prison sentences and fines.

In response to the management lapses exposed during the investigation, the Dengzhou People’s Procuratorate issued suggestions to the city’s medical insurance bureau. These included standardizing e-medical insurance card activation workflows, strengthening confidentiality regulations, enhancing third-party partner review processes, and strengthening risk oversight to protect residents’ personal information.