“Police believe that this transnational criminal group has successfully carried out more than 400 similar phone scams since April this year, totaling over HK$61 million,” said Superintendent Dicken Ko Tik of the police’s Cyber ​​Security 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 false IDs to buy and register Hong Kong phone cards before setting up bases to manage large numbers of phone numbers.

This move allowed foreign members to defraud Hong Kong residents over the phone by posing as customer service representatives of legitimate companies.

Police launched an investigation after receiving information that criminals were registering prepaid phone cards online using false identification documents.

Officials found that between May and August, three Malaysian men used computer software to change the details on their passports and Hong Kong identity cards and then registered at least 300 prepaid phone cards online.

Officials said the gang misused the phone cards to commit phone fraud by posing as customer service representatives and pretending to collect security deposits in order to help victims cancel paid services.

According to police, the group had set up modem pool devices in bases across the city to convert traditional telephone signals into online signals, allowing foreign criminals to commit fraud using phone cards inserted into the modem pool devices.

During the operation, officers seized 87 modem pool devices, 15 computers and more than 80,000 prepaid phone cards.

Police said the arrested Malaysian men came to Hong Kong as tourists and earned about HK$10,000 to HK$16,000 a month through the fraud.

The gang also recruited Hong Kong residents to operate the platform. The five Hong Kong residents arrested in the case were proven to have mainly supplied the city’s prepaid phone cards and identification documents for registration under their real names.

They also transported materials, rented units and provided bank accounts to accept black money.

According to police, officers contacted more than 1,000 people who had received calls from the phone cards identified during the investigation. 17 of them were prevented from transferring money to the scammers.

“Due to the large number of phone cards involved, the police investigation is still ongoing,” said Chief Inspector Lee Chun-man. “We hope that we can prevent more residents from being deceived.”

The Telecommunications Regulation (SIM Card Registration), which came into force in September 2021, requires telephone users to carry out real-name registration for SIM cards with their telecommunications service provider.

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

The police said they had set up a task force in 2022, jointly with the Communications Authority and telecommunications service providers, to regularly review the real-name registration program.

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

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

The 19,897 cases recorded accounted for more than 40 percent of crimes during this period, with the total amount amounting to HK$4.48 billion.

Police had previously said that scammers’ methods had evolved over time and the number of criminals posing as customer service representatives of e-shopping sites, online payment platforms and telecommunications companies had increased.

In the first half of the year, the police registered 1,605 cases of such fraud, and a further 1,111 were reported in July alone.