Crackdown on data leaks reveals tip of iceberg

(Ecns.cn) –- Rampant leaking of personal data has become a pressing issue in China following a spate of recent cases involving the illegal trade of private information, a trade that is notoriously difficult to police.

Since April 20 of this year, authorities have for the first time launched a nationwide crackdown on the theft or misuse of personal information in which more than 1,700 suspects have already been apprehended, according to the Ministry of Public Security.

Now, with 38 data trading "sources" uncovered, a rough outline of the industry has begun to surface, notes the Beijing News.

Big money, fast

After surveilling the vicinity for over three weeks, plain-clothed policemen stormed last Friday into a rented apartment in Changsha, Hunan Province, where they caught three suspects red-handed selling personal information online.

The three people were members of an organization called "China's Ministry of Resources," a criminal group that illegally stores and sells personal details.

Meanwhile, another team of policemen kicked down the door of a hotel room in downtown Changsha and apprehended Zeng Zhi (alias), a leading member of the same organization.

According to the suspects, the organization collects individuals' private information by conducting surveys and arranging them into different categories such as shopping mall customers, car owners and bank account holders. The data is then sold to various "clients."

Guo Gang, a policeman on the case, revealed that they found two computers in the apartment containing the personal information of 150 million individuals.

According to Zeng Zhi, the business is very lucrative, and he still recalls how excited he was the first time he sold data to a client. In most cases, a single transaction can bring in thousands of yuan, and one can easily become a millionaire in only two years, he added.

Furthermore, new data is always in demand and some clients even ask for private information that has not yet been obtained, Zeng said, which creates a whole new business opportunity.

Surveys or spying?

To meet increasing client demand, many companies have begun to carry out challenging tasks such as illegal surveys and commercial espionage.

Also in Changsha, police took down a company that spied on people and traded private information under the disguise of a "marriage rights protection" service. According to police, the company's main operations included catching adulterers in the act and confirming extramarital affairs for paying clients.

The price of these "marriage rights surveys" was 1,200 yuan (US$190) per day, which covered a 24-hour follow-up and evidence of all abnormal behavior, reports the Beijing News.

Moreover, if a client further requested help to save his or her marriage, the company would attempt to separate the cheating partner from the third party and offer counseling or psychotherapy. The cost of such services was between 20,000 and 60,000 yuan (US$3,172 and US$9,516).

The company also conducted business intelligence for clients who wanted to put their competitors at a disadvantage, a service that usually started at around 15,000 yuan (US$2,379).

According to an insider, "marriage rights surveys" not only violate the law, but also wind up destroying most marriages in the end.

Zhu Yanjun, another police investigator, revealed that the majority of the terms in the contracts of such "surveys" imply that illegal methods will be used to collect information. Yet in an attempt to win the trust of the public, the company's advertisement used a logo similar to a police badge.

Who can you trust?

In October, police in Beijing and Guangdong Province looked into several organized crime cases where personal information had been illegally accessed. Based on the evidence collected, it was found that some of the employees at financial institutions, telecommunication companies, or other organizations with massive personal databases, were selling the personal information of their customers.

China Software Testing Centre (CSTC), an institution affiliated with the Ministry of Industry and Information Technology (MIIT), estimates that 70 to 80 percent of personal information theft in China comes from insiders, and that currently many service providers give their employees access to customer information without proper authorization.

Meanwhile, the difficulty in combating personal data leaks also lies in the fact that police must have sufficient evidence before taking further action.

Despite such hindrances, police say they have already closed 611 companies that illicitly conducted surveys, and have destroyed 161 unauthorized databases containing massive amounts of personal information.

Because the current regulations on privacy protection fail to effectively supervise banks, hospitals and telecom companies, earlier this month China drafted a new set of guidelines on personal data protection which cover the gathering, processing, transmitting and removing of data.