"The "Huawei 5G Experience" Scam: How Many People Have Fallen for the Prize Scam?
By Zhao Jiaxin and Jiang Xue Oct 8th, 2020
Mushroom was surprised when she won a Huawei tablet PC PC from a young man in a black work uniform with a "HUAWEI" logo on it. She had never won anything before.
On August 15, 2020, while walking on a street in Longhua District, Shenzhen, Mushroom encountered a young man who claimed to be an employee of the Huawei 5G Experience store.
"He called me 'sister' and said that the store was trying to achieve sales targets and asked me to scan a QR code and vote for him," Mushroom recalled to Guhe Media. The young man also gave her a cheap Bluetooth headset, saying, "But the headset is of inferior quality, and I haven't heard of the brand. I thought he was just a young boy, so I helped him out."
After voting, the young man helped Mushroom to access a lottery platform, and she won the tablet PC. The young man was more surprised than Mushroom, exclaiming, "It's impossible. How could you be so lucky to win the grand prize?" He then instructed Mushroom to save a screenshot and took her to the store on his electric bike to claim her prize.
Little did Mushroom know that the young man who called her "sister" was luring her into a well-planned scam. Many similar victims have fallen for this scam, which has spread across the country. Guhe Media investigation found that this 5G experience store scam is an upgraded version of previous scams, with the scammers targeting young people this time."
The Temptation of QR Code Lottery
It was a store with the sign "HUAWEI" outside and blaring music. The counter only sold headphones, for Apple products. A "somewhat mature" customer service representative welcomed Mushroom and introduced her to a lottery event where she could win a tablet PC. "She spoke very quickly and was a bit overwhelming," Mushroom recalled.
The customer service representative asked to see Mushroom's Alipay and Huabei accounts one after the other, claiming it was to confirm that Mushroom hadn't participated in similar activities before. However, "she
Screenshot of the winning page (source: victim Danajun)
was probably looking at my Huabei credit limit, and whether I had 3000 yuan unused," Mushroom recalled later.
The representative asked Mushroom if she had spent 3000 yuan on phone bills in the past ten years. "I thought, of course, I have, why do you even ask?" Mushroom said. Then the representative said that the company had a partnership with a telecom operator, and if Mushroom wanted to claim the tablet PC, she would have to prepay 3000 yuan in phone bills via Huabei. This 3000 yuan would be returned to Mushroom's mobile account each month as a refund on phone bills.
The representative asked Mushroom if she could afford it and told her that she could decline to claim the prize if she couldn't. Mushroom thought she could save money for a month, so she signed the "confirmation letter for claiming the prize" and added the representative on WeChat.
Inside the “Huawei” store (source: "Charging phone bills to send tablets are deceived" group chat)
Mobile phone quota business acceptance form (Source: Victim Ren Jie)
Mushroom didn't know how to use Huabei, so the representative clicked a few buttons on her behalf. "I was a little confused at the time, and I seemed to have entered my password, but I didn't know if it was for the transfer, I thought it was some kind of agreement, and I transferred 3000 yuan via Huabei without thinking," Mushroom said.
The money went to the other party's account, and all Mushroom was left with was a text message confirming that the recharge was successful and a Huawei C5 tablet PC worth less than 2000 yuan.
"Huawei C5 is a low-quality tablet PC. I thought it was okay since it didn't cost me anything. Later, I became curious and searched for this activity on Zhihu, only to find out that after a period of contract fulfillment, the merchant would run away with the money, and her 3000 yuan would never be fully refunded to her.
"I realized there were many loopholes, and it was obviously a scam!" Mushroom panicked at the time.
Looking back on the whole process, Mushroom found that the most obvious loophole was that the merchant verbally claimed to be a Huawei-authorized experience store but could not provide an authorization agreement. The merchant also claimed that Huawei and the telecom operator were partnering to hold the event, but the payment was not made to the three major telecom operators' accounts, but directly to the mobile phone store. This means that the mobile phone store can manipulate the refund amount in the following phone bill refunds, and even not refund at all.
"At the time, I thought, over 3000 yuan, I could spend it all in ten years... Later, I realized that no one could guarantee that this store would make monthly payments for ten years. This agreement is just a hollow promise." Another victim, Qiu Zi, wrote in a Zhihu answer.
So, does the activity of "prepaid phone credit rebate with a tablet PC or mobile phone gift" (referred to as prepaid gift activity) really exist? Does Huawei really cooperate with the telecom operators? Guhe Media contacted the customer service of China Mobile and China Unicom, both of which said that there is no prepaid gift activity recently, and even if there is, "only the business hall is qualified to hold it, and it will not be authorized to mobile phone agent stores." In addition, a senior customer service manager of Huawei also said that there is no related activity.
Upgrade of scam
In fact, it's not the first time that scammers have used prepaid gift activities to cheat people.
Major telecom operators such as China Mobile, China Unicom, and China Telecom have launched such activities, which can be traced back to the era of PHS (Personal Handy-phone System) in 2002. The essence of these activities is for telecom operators to offer benefits to users in order to improve their operations. However, since the launch of this activity, various scammers have constantly used people's trust in the major telecom operators, posing as authorized stores, misleading consumers, and then cheating them out of their money.
Scams happen every day and have been going on for more than ten years.
At first, these scams were carried out in the form of recharge cards. As early as around 2009, some street stalls selling mobile phone recharge cards hung up
Huawei Tablet PC M3 Youth Edition (Source: Victim Danajun)
slogans such as "recharge 100 and get 100, recharge 200 and get 200", and most of these recharge cards with "China Tietong" and "China Unicom" logos were actually "callback cards" that had already been banned by the Ministry of Industry and Information Technology.
Later, with the expansion of the mobile phone market, new forms of fraudulent activities such as telephone marketing and door-to-door trading also emerged. Around 2010, many people received calls from "China Unicom" or "China Telecom customer service" claiming to be carrying out promotional activities, saying that as long as users prepaid a certain amount of phone credit, they could get a free mobile phone, and the prepaid phone credit would be returned in installments to the customer's phone. Initially, the phone credit was returned for the first few months, but afterward, it stopped completely, and the "customer service" at that time disappeared completely."
In 2019, the concept of Huawei 5G was widely promoted and popularized, and a batch of "Huawei 5G Experience Stores" and "5G Smart Life Halls" appeared. They claimed to be holding activities in cooperation with Huawei and operators and set up a scam of "prepaid phone bill rebate and free tablet PC or mobile phone", which was no different from a scam ten years ago. The only difference was that this time, the target of the scam shifted from the elderly to young people.
According to investigations by Guhe Media, a victim transferred 3,599 yuan as a prepaid phone bill at a mobile phone shop in Guangzhou Tangxia Shangshe on September 19, 2019, and discovered the scam on April 15th of this year. "The promised rebate was not received that month, and no one answered the phone or replied to the WeChat messages. The store was also closed."
Another victim paid 69 yuan in activity fees at another Huawei store in Guangzhou on the evening of August 23, 2019, and then made a one-time payment of 3,599 yuan. At the end of June this year, he found that the phone bill had not been returned for two months. "Then I contacted the manager in Tianhe District on WeChat, but no one replied. When I searched online, I found that many people had been scammed."
"The store has been transferred, and no one can be contacted."
"The phone bill has not been credited, and the phone has been suspended."
"During the epidemic, the phone bill was not returned, and I found out through Zhihu that the store staff had run away."
...
The voices of each victim have surfaced. A small part of the massive scam iceberg has been exposed.
Guhe Media contacted many victims and found that most of these scams followed similar routines.
The first step is to lure people into the store. Dressed in Huawei work clothes, the "store staff" lure customers with flyers, QR code voting for prizes, and 5G surveys, and give away small gifts like face masks and power banks to invite them to participate in activities.
The second step is to persuade customers in the store. The store usually plays loud background music to cover up a normal conversation, and the staff deliberately speaks faster to interfere with the victim's normal thinking ability. Then they falsely claim that by prepaying a certain amount of phone bill through loan apps such as Huabei, Jiebei, or JD Bai Tiao, the customer can receive a tablet PC or phone as a prize, and the prepaid phone bill will be returned to the customer's phone accounts. Many customers complete the transfer and unfortunately fall into the trap. But some customers may not have the ability to pay or show too much resistance, and in this case, the staff will use the excuse of "the quota for giving away tablet PCs for the day has been used up" to ask the customer to leave and stop the scam.
The third step is to run away with the money. To reduce customer suspicion, the merchant will indeed return the phone bill for the first few months after the prepaid payment. After that, the store will run away and stop returning the rebate.
Obviously, these stores did not intend to follow the contract and return the money at the beginning of the agreement. According to a reporter from Sanxiang Metropolis Daily, the time these shops rented storefronts was not long, and the rent payment method was monthly or quarterly, so the cost of closing the store was low, but victims suffered significant financial losses due to the store closing.
Now, it seems that the logic of these shop scams is "meticulously designed", from the initial "QR code lottery" to the final "Alipay transfer". Every step is precisely planned and interlocked, leading victims to step by step into the abyss.
Faced with such a well-designed scam, most victims are caught off guard. After being scammed, most of them choose to handle it on their own and do not tell their family and friends. One victim said, "I didn't dare tell them because my family's financial situation is not good, and 3,599 yuan is not a small amount. I'm afraid they would worry."
Seeking justice is difficult, as a business license seems to be a " get-out-of-jail-free card "?
The victim Runwei from Jiangmen, Guangdong, did not tell his family about this experience because "it's too shameful! I didn't dare to say it."
In this situation, seeking help from the police became his first reaction. He thought the police could help, but the reality was much more complicated than he imagined. "After the incident, I called 110 to report the crime but was told that it was an economic dispute, not a fraud, and was asked to contact the consumer rights hotline 12315. Then I went to 12315, but they told me that the shop had closed and they could not mediate for me. They suggested that I take legal action or report it to the police."
Another victim consulted Huawei customer service, but they said they could not handle it, "they asked me to report it to the Consumer Association or the police station. The customer service said they would report it to headquarters, but there was no follow-up." The victim also called the consumer hotline, but the
Guangzhou government affairs SMS receipt (source: victim Danajun)
business had already moved and the Industry and Commerce Department could not provide assistance.
Some people also used the Black Cat Complaints platform, but "it was not accepted."
In addition, Runwei recalled that he had helped Guangzhou friends contact a TV station in the hope of exposing the matter, but at that time, only a small number of friends were in Guangzhou, and the time was too tight to gather people on the same day, so it was ultimately unsuccessful.
Guangzhou victim Xiaoxun personally went to many places, such as police stations, Industry and Commerce Bureau, Consumer Association, and also called 110, 12345, and 12315, "but it was all in vain, no one cared."
"Why doesn't the police care when the facts are so clear?" Angel, a victim, said disappointedly.
Not only seeking help from the police, but also other common means of seeking justice such as complaining to Huawei customer service, calling the consumer hotline, and contacting the operator's responsible person are no longer effective in this obvious scam. The heavy-handed crackdown by relevant departments against crimes seems to have nowhere to strike.
"It's because they can also exploit legal loopholes and play on the edge of the law." A police officer from a certain police station in Guangzhou told Guhe Media. As far as he knows, the Industry and Commerce Department has checked these shops before and found that they all have business licenses. Some victims have also provided Guhe Media with information about the shops, proving that they are indeed legally registered with the Industry and Commerce Bureau and are all limited liability companies owned by individuals.
"They are operating illegally behind the facade of a legitimate storefront," the police officer said.
Since the "Huawei 5G Experience Store" has a valid business license, does Huawei have jurisdiction over these stores? According to Huawei’s customer service, their offline system is large and consists of officially authorized experience stores and third-party stores. The officially authorized stores are directly managed by Huawei. "As for third-party stores, they are registered independently with the industry and commerce bureau as individual merchants and have independent operating rights. Not all of these stores are fake; they act as agents for Huawei's products, and Huawei has no jurisdiction over them."
Regarding authorization issues for stores, the customer service representative stated, "If a store is claiming to be a Huawei-authorized experience store and is deceiving consumers to achieve their own profits, this will harm Huawei's official interests, and it is necessary to take legal action against them." However, if a store only claims to be a third-party dealer, "this is their individual behavior, and Huawei has no authority to govern them." Even if Huawei takes legal action, they can only "report it to the industry and commerce department and the police and assist with the process, but they have no supervisory or punitive authority over the store."
"A business license is like a get-out-of-jail-free card," Xiaoxun said.
Economic dispute or contract fraud?
In the prepayment and free phone scam, to seek police assistance, it is necessary to clarify a core issue: whether this type of case belongs to an economic dispute or a contract fraud. In China, investigative power is prohibited from interfering in economic disputes, that is, the police have the right to handle criminal contract fraud cases but have no right to handle civil economic disputes.
An economic dispute refers to a dispute over economic rights and obligations between market economy subjects, which belongs to civil cases and does not constitute a crime. The crime of fraud refers to the act of obtaining a large amount of public or private property through fabricated facts or concealing the truth for the purpose of illegal possession, which is a criminal case. In the prepayment and free phone scam, if it constitutes a crime, it belongs to the crime of contract fraud.
In recent years, cases of defrauding money through signed contracts have emerged one after another. Contract fraud and economic disputes are extremely difficult to distinguish and identify, becoming a hot issue in judicial practice. Lawyer Li Huaming from Guangdong Pinsong Law Firm told Guhe Media that to qualify such cases as fraud, two conditions must be met simultaneously.
First, in terms of subjectivity, the scam must have the purpose of illegally taking possession of the other party's property. Based on the principle of presumption of innocence in Chinese law, if there is no solid evidence, the above situation can also be understood as the merchant having the intention to actively fulfill the contract but being unable to continue fulfilling it due to lack of funds. In the prepayment and free phone scam, the merchant did indeed return the phone bill in the first few months, "it is difficult to prove that they had the intention of illegal possession of the property at the time of signing the agreement."
"That's the key point that makes it difficult to file a case," Li said. However, for scams committed by a group, the determination is more clear-cut. "Having carried out many scams using the same method is sufficient to demonstrate that their purpose is to illegally take possession of the property."
Secondly, in terms of objectivity, a scam needs to conform to "fabricated facts or concealment of the truth". According to Lawyer Li, in these types of cases, there is not enough evidence to prove "fabricated facts". Even if the other party falsely claims to have authorization from Huawei, as a third-party store with the right to sell Huawei products, it can only be considered civil fraud, which falls under civil disputes.
"Fraud cases have always been a troublesome issue, even experienced judges have to make (difficult) considerations," said Lawyer Li Huaming. Therefore, he believes that it is normal for
Chancheng Public Security arrests criminal suspects who are pre-deposited and sent to the plane
(Source: Chancheng Public Security)
public security agencies in different regions to make completely different judgments.
When dealing with such cases, some local police forces have classified them as fraud, such as the Shenzhen, Guangzhou, and Foshan police who have investigated and dismantled criminal gangs involved in "prepaid phone cards with free phones" scams. However, more areas have classified them as economic disputes. Victims, often face difficulties in filing a case.
The Guangzhou police mentioned earlier also expressed helplessness about this, "Not only here, but there are too many such cases in Hangzhou, Shenzhen, Xi'an... I am furious and want to deal with them. But dealing with them must also be in accordance with the law and regulations, and not abuse power."
Self-help: "Everyone is insisting on their rights and no one is giving up."
Many victims are both hoping for a successful case and actively seeking online mutual assistance.
After reading about the experiences of other victims on Zhihu, Mogu, referring to the experiences of netizens, went to the store with a friend on a voice call and recording software to demand their money back three hours after discovering the scam.
Upon entering the store, Mushroom immediately said in a firm tone, "I don't think your tablet PC is good and this promotion is not worth it. I want a refund." The customer service reluctantly responded, "Fine, just return it. We've told you several times before about signing up. Now you're returning it." After making Mushroom wait for a bit, the store refunded the money.
Mushroom wrote about her experience of being scammed on Zhihu and replied in the comments that she threatened to report to the police and insisted on getting her money back.
On various social media platforms, many victims not only shared their experiences of being scammed but also provided methods for recovering their money. The most common method of recovery is to be firm when visiting the store before they flee and to bring along a few friends. Even if the victim reports the incident to the police or complains, it is rare to recover the money once the store has fled.
"To be honest, they are also afraid of our police station." The aforementioned Guangzhou police officer said that there were three such stores in their jurisdiction and that they had registered the identity cards of the store's employees and educated them. If a store is reported to the police by the public multiple times, it will be closed. Therefore, if the victim is resolute in demanding a refund, the store employee will refund the money.
Later, Xiaoxun from Guangzhou joined a WeChat group called "Scammed by Top-up for Free Tablet PC" (hereafter referred to as the Top-up group). The members of the Top-up group named themselves after the form "scammed location + prepaid top-up amount + handling fee." For example, Xiaoxun's group nickname was "Shangshe+3899+69." In a page-long group notice, the group leader, Liu Ping, reminded group members to collect evidence of the scam and notified them of online court news. Finally, she shared the registration link and collection results of the class-action lawsuit registration form. The registration form had 114 records of filling in. In addition to collecting the names and contact information of victims, the form also detailed the scammed store, receipt stamp and text contents, operator, gift, evidence list, scammed amount, and other information.
After passing WeChat friend verification, Xiaoxun effortlessly forwarded 12 screenshots and 8 TikTok short videos to Guhe Media, all of which were collected from the scammer’s WeChat moments and TikTok account. He also gathered the scammer's phone number and company registration information. After directly negotiating with the scammer, Xiaoxun
Online case filing of some WeChat group members (Source: Liu Ping)
was able to get back 2,000 yuan but only managed to reduce some of the economic losses. "They have scammed at least millions of yuan. I know of one scammer who bought a Porsche worth a million yuan in May or June, and their Alipay transactions were also in the millions," Xiaoxun said.
Liu Ping's group nickname is "Tangdong 2999+69". She traced the registration information of the scammer Xiao and his communication equipment store through platforms such as Qixinbao and has now completed an online filing, waiting for the online trial on November 25th. In order to file the case online, "I visited Guangzhou Tianhe District Court, Dongguan Court, Dalang Court, and Dongguan Second People's Court in person," Liu Ping said in the group.
Among the victims known by Xiaoxun, only 15 people chose to file a civil lawsuit with the court, and less than 10 people have actually filed a civil case. Runwei said that all 51 people in their group are insisting on their rights and no one has given up, but only 4 people were willing to file the case online, and only 1 person has successfully filed it.
"Not participating in safeguarding our rights is because they cannot see any hope. If there is hope, most people are still willing to participate in safeguarding their rights," Xiaoxun said.
Many "Huawei 5G stores" are still operating normally
There are 141 victims in the top-up group, and most of the group members were scammed in Guangdong. While Runwei has also joined another WeChat group with 51 victims, whose main victimization area is also in Guangdong. Many group members have entered the group from public platforms such as Zhihu and Tieba. One-to-one and one-to-many invitations have led to the growth of the group. It is unknown how many similar WeChat and QQ groups exist, and it is even more difficult to calculate the exact number of victims.
Jiang is the legal representative of a "Huawei mobile phone store" and has defrauded dozens of group members in the top-up group. Group members once took photos of him and posted them in the group. Recently, a group member passing by Longdong in Guangzhou claimed to have seen Jiang drinking tea in the store and took a photo of him. Another group member joked, "You already know Jiang now?"
Through investigation by Guhe Media, it was found that there are at least ten such mobile phone stores in Guangzhou, distributed in various districts, and pedestrians are lured into the trap every day. Guhe Media conducted an undercover investigation of two mobile phone stores that have been scamming for months in Tianhe District and found that they are still operating normally, and continue to lure people into the store. When someone took photos and videos, one store employee even made a scissor-hand gesture, seemingly without any scruples.
A "5G smart life museum" in Tianhe District, Guangzhou is still open (photo by Jiang Xue)
On August 3, 2020, Runwei learned that the case was successfully filed and would be heard on September 29. In mid-September, Runwei received a text message about the trial being postponed, stating that the subpoena could not be properly served due to the defendant absconding and that the court would continue to attempt service.
As of the time of writing, Runwei has not received any further information from the court and the status of the case has not been updated.