Facing the Real Risk of Theft from Your Bank Account in China

An increasing number of friends are reporting troubling cases of theft from their China bank accounts. One friend, after years of working in China and saving every penny, was preparing to return to the US, but suddenly every penny in her ICBC bank account was stolen. The ICBC bank officials told her that someone had a copy of her card and had taken the money out. She asked how this was possible without knowing her password. No explanation was given, except that it was somehow her fault. She spent five days arguing with them and got nowhere. They said that the thief could have been working with her to perpetuate fraud on the bank, so why should they refund her money? Her only option now is to sue, but she has to go back to the US soon and fears she won’t have the ability to pursue the case. But we’ve encouraged her to work with a lawyer to fight this. She will, and I hope to have good news to report sometime.

Her story has almost exactly the same set of facts that we find in a chilling account, “How I sued the world’s largest bank and won” at Shanghaist.com. In this case, it was a smaller amount, 15,000 RMB that was taken from the author’s ICBC account. He encountered the same helpful consumer service policies and attitudes, and was forced also to sue for something that was clearly not his fault. He won, and it only took 7 months and some modest attorney fees to get his money back.

If you have a bank account with an ATM card, there is a real risk that one day money will begin disappearing from your account. There are some very high risk factors in China you need to understand:

1) The daily limit for ATM withdrawals is much higher than it is in the U.S. and Europe. A thief typically can take out 20,000 RMB a day (over $3,000), which is 5 to 10 times higher than typical US limits.

2) The daily limit may not be over a 24-hour period, but may be based on the calendar date, so if that applies to your bank, then a thief can take 20,000 RMB out at 11:55 pm, and another 20,000 RMB out at 12:05 PM.

3) Banks in China often don’t have effective anti-fraud protection.

4) There are many thieves with card copying or card scanning devices who can make a duplicate of your card. If they or a small video camera can watch you enter your password, having your account number and your password leaves you defenseless.

5) Thieves can sometimes pull money out of your account without using your password. I don’t know how this happens, but it has happened to multiple people in China, and it happened to us with our US bank.

6) When someone pulls money out of your account without knowing your password, it should be the bank’s fault and they should reimburse you. But consumer service attitudes and policies may not be identical to those in your home country. China banks may tend to blame the customer and argue that maybe the thief was collaborating with you, so they might not cooperate unless you take them to court. You can sue and win in China, but it will take a lot of work and the help of an attorney.

Because money in the bank is so vulnerable, I suggest several best practices:

1) Do not keep large amounts in any single Chinese bank. Move a lot of it into US accounts without ATM cards or with two-part authentication, and keep plenty of cash.

2) Use your bank cards as little as possible. Instead, use cash to make payments when possible.

3) Do not let employees walk away with your bank card (they might run it through a card copier device of some kind). Keep your eyes on it.

4) Do not let your card be scanned in any place that seems questionable or seedy.

5) When using ATM machines, look for unusual devices, small video cameras, etc., that might have been added.

6) Keep good records of where you have been so that if the bank says it must have been you that pulled all your money out of your account in, say, Harbin, you can prove you weren’t in Harbin that day.

7) Monitor your bank account frequently, and make sure you receive automatic text messages when money is taken out of your ATM.

8) When you do find a problem, document in detail who you spoke with, what you said, what they said, etc. You will needs lots of documented details if you have to sue the bank to get back missing money.

9) Avoid trusting your money to any bank that has a bad track record of protecting the money of its customers. If you know of banks that have performed well in this regard, please let me know.

These problems are not unique to China, but they seem to be a lot more frequent here and more severe, especially with the high daily minimum that thieves can take out.

If you do online banking, your risks are also high due to hackers. I suggest you use complex passwords that you change often, and only use secure computers to access your bank accounts. It’s good to have a cheap computer that is never used for browsing but only for bank access, and even then keep good firewall and anti-spyware software on it, keep it updated, use more secure browsers like Chrome or Firefox, and don’t use untrusted wifi networks to access your accounts. For added security, use VPN when you access your bank account.

Don’t keep all your money in any one account, and keep a wad of cash somewhere, too. Thieves can get everything, but we shouldn’t make it easy for them.

By |2017-10-24T07:05:04-07:00June 17th, 2015|Categories: Business, China, Finances, Internet, Investing, Scams, Shanghai, Shopping, Surviving, Travel tips|Tags: , |Comments Off on Facing the Real Risk of Theft from Your Bank Account in China

International Flavors and Fragrances: Impressive Breakthrough in Orange Flavor

I’m thinking of investing in International Flavors and Fragrances, a $5 billion market cap company with a strong suite of flavors and fragrances, including a new breakthrough in orange flavor. Many scientists collaborated to identify the key flavor components in orange juice and then sought to mimic them with relatively low-cost materials, relying less on citrus oils that can add a bitter aftertaste and vary wildly in price. I marvel at how inadequate artificial orange flavor is in drinks and foods. I look forward to a long overdue improvement, and if it’s as good as they say, expect a strong increase in sales for IFF.

By |2007-06-17T14:33:10-07:00June 17th, 2007|Categories: Consumers, Investing, Uncategorized|Comments Off on International Flavors and Fragrances: Impressive Breakthrough in Orange Flavor

Thinking of a Career? Consider Geology

Surprising fact: there is a shortage of geologists for companies that do exploration and mining of natural resources like gold, silver, and oil. According to precious metals expert Jim Willie CB:

Don Lindsay, CEO of Teck Cominco, paints a bleak labor picture… Lindsay traced the origins of the labor shortage back to 1997. According to him, the feeder systems were disrupted by the Bre-X scandal, the Asian Meltdown, and the commodity bear market. He expects demand to remain robust from China. Keep in mind that over two thirds of geologists in the world hail from Canadian schools. So if professional shortages exist in Canada, we have a very large problem indeed. Mirroring the crude oil roughneck labor shortage is the mining labor shortage. Another parallel exists. Lindsay points out that within a decade, 60% of all Canadian scientists working the geosciences will be at least 65 years of age. The overall impact is surely that new mine deposits will take longer to find, longer to produce, and cost more.

This is great news if you’re willing to pursue a career in geology. Many of the leaders of mining and exploration companies had their start as a geologist. If you love the outdoors and believe in work that really creates wealth, consider geology.

For investing, the shortage in skilled labor for mining means lower production in the future, and that means that prices of commodities are going to face even more pressure to go up. This is a great time to be heavily invested in gold and silver bullion, energy stocks, precious metals stocks, and uranium stocks like Dennison Mines (DNN) or my favorite, Abaddon Consolidated Resources (ABNAF.pk or ABN on the Vancouver exchange).

By |2007-05-04T17:19:34-07:00May 4th, 2007|Categories: Education, Investing, Uncategorized|Comments Off on Thinking of a Career? Consider Geology

Silver Wheaton: The Silver Stock that Doesn’t Mine Silver

Silver Wheaton (NYSE: SLW) is one of the best ways for investors to take advantage of the bull market in silver. Many people assume it’s a mining stock, but it’s clever business model frees it from the risks of mining while giving it leverage and profitability from silver’s increasing value. It does this by buying the future production of silver mines and miners for whom silver is a byproduct. The miners get an assured price for their production that allows them to expand now, while Silver Wheaton gets their silver. This company owns no mines, but has contracts that allows it to profit from the silver of several major mines. It’s a pure silver play and a real bargain at the moment, in my opinion.

By |2017-12-25T05:42:18-07:00October 11th, 2006|Categories: Investing|Comments Off on Silver Wheaton: The Silver Stock that Doesn’t Mine Silver

Get Out of Debt – or Die

I marvel at how Americans are strangling themselves with debt. Here’s a passage from a recent note from the angriest man in economics, Richard Daughty, a.k.a. “The Mogambo Guru”:

We professional economists call this process the Slow, Horrible Spiraling Death Of An Economy By Inflation Syndrome, but more commonly by its acronym, SHSDOAEBI Syndrome. In the early stages, it can be temporarily delayed by using savings to plug the gap between stagnant income levels and rising spending levels, which resulted from prices rising so high, and so fast.

In the later stages, however, after the “Steal the kids’ piggy banks!” and “Intercept birthday cards from their grandparents!” stage, now with no savings remaining, the onset of economic death can be temporarily forestalled, one last time, with increased borrowing. This is Late Stage SHDOAEBI Syndrome.

And we are already in this advanced stage, if you listen to Martin Weiss of the Safe Money Report, who says “According to Federal Reserve data, the typical American family today has a balance of only $3,800 in cash in the bank, has no retirement account whatsoever, owes $90,000 on their mortgage, and owes $2,200 in credit card debt.”

I know what you’re thinking: How do these average Americans get by on so little credit card debt? OK – there must be a typo in that figure – it’s got to be more. But don’t miss the main point here: we’re doomed unless we get out of debt. Get out of debt now, or perish. And as part of your financial plans, you need to invest in things that maintain value when the dollar crashes. Precious metals can help.

How does one get out of debt? The first step is to begin living within your means. Prepare a budget. Stick to it. Eliminate things that aren’t needs. Be disciplined. Get rid of credit cards. Cut back. You’ve got to live your plan and move forward.

By |2006-10-01T20:14:12-07:00October 1st, 2006|Categories: Investing|2 Comments

Water is the Next Oil: Veolia Environnement, an Interesting French Company for Investors

Veolia Environnement SA is a large French company dealing with the water supply of many nations. They provide the technology for many water treatment and wastewater treatment facilities. They also provide energy services in Europe. They are the leading European heating systems operator in the housing, health, tertiary and industrial sectors, managing both heating and air-conditioning installations. Stock is available to US investors on the New York Stock Exchange under the ticker VE. This stock is a great way to diversify your portfolio. It has done well this year while many US stocks were plunging. Its outlooks are bright, dealing with key environmental areas and vital markets for much of the world. They are proven, profitable, and successful, with significant growth potential. And this foreign stock can help protect your investment when the US dollar weakens due to currency factors.

2017 Update: Veolia is no longer listed on the NYSE, but is available on the OTC market as VEOEF.

By |2017-11-17T04:27:59-07:00September 28th, 2006|Categories: Business, Finances, Investing|Comments Off on Water is the Next Oil: Veolia Environnement, an Interesting French Company for Investors

Silver Investing: Now Is the Time to Buy the Metal and Mining Stocks

Silver was knocked down to below $11 an ounce recently, apparently dragged down by falling oil and efforts to strengthen the dollar (alleged by some to be pre-election manipulation to keep voters happy). But the fundamentals of silver point to a much higher price potential. Global silver inventories are down. Millions more ounces of silver are being consumed industrially than are being produced, and production of silver from mines is difficult to increase – partly because silver tends to be a byproduct from mining of other metals, and if their demand does not increase dramatically, there is little motivation to ramp up silver production.

A huge reason to expect silver to rocket upward in the near future is the emergence of new hedge funds devoted to silver. Barclays of England brought the SLV exchange traded fund online this year for American investors, and now more such funds are planned for Europe, Australia, and New Zealand. Investment demand for silver can be expected to escalate as it finally becomes easy to invest in, and as people recognize it as protection against inflation. But the key dynamic is that silver is rare, being used up steadily for industrial needs. In fact, it is rarer than gold in terms of available physical silver above ground. But it’s an a ridiculously low level of around 1/60th the price of gold, when historically it’s been at 1/16 or higher – a logical price given the relative amounts present in the earth’s crust.

What all this means is that today, this month, perhaps this year, you have a marvelous window of opportunity to invest in silver. Get the real physical metal, get some SLV exchange traded fund in your 401(k), and get some silver stocks such as Sliver Wheaton (SLW) or Silver Standard Resources (SSRI). If you want a speculative junior mining company (for advanced traders only), try Clifton Mining (CFTN.pk) or Sterling Minerals (srlm.ob).

By |2016-10-24T05:58:02-07:00September 14th, 2006|Categories: Investing|1 Comment

Celgene’s Anti-Cancer and Anti-Inflammatory Pipelines: The Reign of Imids

Celgene, one of the best biotech/pharma companies out there, has an incredible business model, amazing drugs, and a very hot pipeline. I recommend it as a key part of your investment portfolio. One reason is that Celgene is developing a whole class of new but related drugs called IMIDS, building on the success of thalidomide and Revlimid in dealing with certain cancers and other diseases. Its price has been held back this summer and is ready to move forward at this excellent buying opportunity.

As reported by the Multiple Myeloma Research Foundation:

Like thalidomide, IMiDs are immunomodulatory agents (drugs that can modify or regulate the functioning of the immune system). IMiDs appear to have multiple actions, including both anticancer and anti-inflammatory activities.

Details on IMiDs’ Mechanism of Action

IMiDs affect the immune system in several ways. They induce immune responses, enhance activity of immune cells, and inhibit inflammation. IMiDs appear to alter the levels of various cytokines (growth factors or factors that inhibit growth) and affect cells of the immune system. Studies show that IMiDs:

  • Enhance the activation of T cells
  • Enhance the activity of natural killer cells, which help kill cancer cells
  • Enhance production of interleukin 2 (IL-2), a growth factor for T cells
  • Inhibit inflammatory cytokines including
    • Tumor necrosis factor-alpha (TNF-α)
    • Interleukin 1-beta (IL-1β)
  • Stimulate the production of interleukin 10 (IL-10), an anti-inflammatory cytokine

In addition, the IMiDs inhibit the growth of new blood vessels (angiogenesis) through inhibition of vascular endothelial growth factor (VEGF).

Celgene has been down a little in the past few weeks, and frankly seems coiled and ready to spring. Watch for a strong move this week or early next week. By the end of the year, I would not be suprised to see it 30% higher than it is now.

By |2017-11-17T04:38:24-07:00September 10th, 2006|Categories: Investing|Comments Off on Celgene’s Anti-Cancer and Anti-Inflammatory Pipelines: The Reign of Imids

Economic Slowdown = Decreased Tax Revenues, Accelerating Debt

A valuable and no-nonsense source of analysis on the economy is JS Mineset. Author Jim Sinclair’s commentary on inflation, debt, finances, mortgages, investing, and especially precious metals offers a savvy look at what most investors are gleefully ignoring. Most recently, he has exposed the foolishness of the media/government/Wall Street spin about the “Goldilocks economy.” What we are facing is much more painful and serious than the spin-masters would have us believe, but there are things you can do – or must do! – now to prepare yourself. Buying more stocks like Ford and General Motors is not the answer.

By |2006-09-03T17:56:15-07:00September 3rd, 2006|Categories: Investing, Politics|Comments Off on Economic Slowdown = Decreased Tax Revenues, Accelerating Debt

Gold: Be Prepared for a Dip, But Don’t Miss the Spike

Central Banks may yet make efforts to drive the price of gold down further this year to allow them to purchase more, so I suggest being ready to jump in and buy if gold dips below $580 an ounce. Might go below $550 an ounce, one gold expert told me. That’s if we’re LUCKY. There is also the potential for geopolitical tensions and the reality of rampant inflation and inadequate quantities from mines to generate a rapid and long-lasting increase to much higher levels, such as at least $800 an ounce. What to do?

Roger Wiegand offers some compelling reasons to buy gold now. I think a portion of your savings needs to be in gold and silver, the physical metal, and I would begin buying some now. I’d keep some cash on hand, maybe 30% of your PM budget, to catch a possible dip between now and late September. If it rises to $700 or so, well, you’ll be glad you had some gold, and you’ll still have cash to watch for future buying opportunities in precious metals of mining stocks, or some other investment. And if there is a correction first, buy with both fists and then HOLD. Don’t even think of selling gold below $2000 an ounce unless you have no other choice to meet your obligations. We will see such prices, perhaps within a couple years.

By |2006-09-15T17:55:02-07:00August 20th, 2006|Categories: Investing|Comments Off on Gold: Be Prepared for a Dip, But Don’t Miss the Spike

What Determines the Price of Stocks?

Surprisingly, many people don’t understand the most basic aspect of the stock market, the way stock prices are determined. Here in the United States, with our free economy, the price of each stock is determined by “market forces.” The term “market forces” refers primarily to two very important and very funny men little men: Ben Bernanke and Jim Cramer. Ben Bernanke, of course, is Chairman of the Federal Reserve Bank, and Jim Cramer is America’s most famous investment personality and host of a wild and crazy TV show called “Mad Money” on CNBC.

So how do they do it? Simple. Nearly all serious investors and fund managers watch Jim Cramer’s show every night. He talks about dozens of stocks, and takes calls from many callers with questions about stocks in his “Lightning Round.” When he likes a stock, he says “Buy! Buy! Buy!” very fast, waves his arms excitedly, and presses buttons to make bullish sounds. This elicits a Pavlov-style reaction from greedy investors who rush out and begin to buy tons of that stock from people who now know their stock is more valuable. The result is that the price goes up, up, up. Sometimes he doesn’t like a stock, and says “Sell! Sell! Sell!” This makes everyone want to sell, and forces the price to go lower. But mostly he talks about stocks he likes, so on the average, the stock market goes up. Plus his show is very entertaining, which makes people happy and willing to buy more stocks and drive up the price.

Of course, it’s not as simple as that. There are some more complicated effects going on. For example, Mr. Cramer also shouts and screams and displays animated graphics and throw chairs across the TV studio and tear off the heads of bulls and plays many other funny sound effects and waves his latest book around while people shout “Boo-Yah!” over the phone. (That’s another fun part of Mr. Cramer’s show – the phrase “Boo-Yah,” like “Ditto” on the Rush Limbaugh show, means “I don’t know what you’re talking about, but I am ready to believe everything you say.”) All this may sound complicated, but it works and usually helps our economy to grow. It’s a beautiful mechanism, this free market of ours.

But the stock market can’t go up forever. That’s where Mr. Bernanke comes in. Just like his predecessor, Alan Greenspan, Mr. Bernanke plays a much more subdued but potent role. He is not on television every night. He does not scream and shout and throw chairs across the TV studio and tear off the heads of bulls or play funny sound effects and wave his latest book around while people shout “Boo-Yah!” In fact, he’s very boring, but also very scary. He only comes out from his crypt for a few minutes every few weeks or months, but when he does, everyone gets very worried that he might not be happy. It is not good when he is not happy, because he is the most powerful man in the world and can do whatever he wants to the economy by changing interest rates, which determine whether companies and the whole economy will have money to grow or whether they will shrivel and die. So when Mr. Bernanke is worried that the market has gone up too much or when he’s just feeling grouchy, he comes out and says “Boo!” (well, actually he uses many more words than just that one, but they all boil down to “Boo!”) and then all investors become really scared and start selling everything so that prices go down again.

When prices go down, that is called a “correction,” and market analysts tell us that this is good and healthy, even though everybody is poorer now. But then Mr. Cramer comes back on TV and says that since everything is cheap now, it’s a great time to “Buy! Buy! Buy!” and soon everyone starts buying and the market goes back up. This is how we get cycles in the market.

Cramer and Bernanke, yin and yang, light and darkness – they are all part of one great cosmic whole, each element playing its unique role.

By |2017-11-17T04:24:25-07:00July 6th, 2006|Categories: Investing, Satire|Comments Off on What Determines the Price of Stocks?