It was almost a week since the confrontation with his father but my friend still seemed unsettled as he recalled how it began with a workman installing a gas alarm in his parents’ flat. The man said the alarm was mandatory and that there was an installation fee of Rmb200 (€26) but after he fitted it, my friend’s father refused to pay.
He knew that others in the building had recently had alarms installed but had heard nothing about a fee so he decided the workman was trying to defraud him. When my friend tried to explain that the fee was legitimate after the workman called him, his father exploded, suspecting him of settling the bill behind his back.
“He used language I’ve never heard before. He cursed me, he cursed my mother and he cursed my ancestors. Well he cursed my mother’s ancestors. He left his own side out of it,” he said.
I wanted to hear the details and the actual words his father used but my friend closed his eyes and shook his head.
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“It wasn’t intellectual cursing. It was crude, coarse,” he said.
We were in a Beijing home-style restaurant that was so old-fashioned that it offered no delivery service and the staff wrote down the orders with pen and paper. The table was crowded with dishes my friend ordered for us to share, among them a large plate of pork intestines.
“We usually tell foreigners it’s beef tendons. Chicken feet we tell them are baby ribs,” he said.
What my friend’s father did not know was that his wife had been the victim of a real fraud five years ago that cost her their life savings. Although my friend secretly covered her losses at the time when she told him she urgently needed money, it was not until three months ago that she told him the full story.
Unhappy with the 3 per cent the bank paid on her savings, she discovered a scheme that offered a 10 per cent annual return with interest payments every six months. She was so excited about the opportunity that she persuaded her cousin to sign up, until the cousin’s daughter found out and put a stop to it.
My friend’s mother was undeterred, reassured by the fact that the man who took her money had an official certificate authorising him to run an investment fund. For the first couple of years, her confidence seemed to be vindicated as the generous interest payments arrived punctually every six months.
Then they stopped and she discovered that the fund was insolvent, with the police investigating while the authorities determined how to distribute its remaining assets. Too embarrassed to tell her husband, she turned to her son for the money, finally telling him about the fraud earlier this year.
“She was grateful for what I did but she said it wasn’t the same money. It had taken her so long to save the money she lost and she remembered every step. She remembered looking at a good apple and a bad apple in the market and choosing the cheaper one so she could put away the difference. That was how she saved,” he said.
Ponzi schemes targeting older people is a problem that is exercising the authorities in China, who issue regular warnings to avoid offers that look too good to be true. Some victims are enticed with free gifts or travel vouchers to pay for future home care or to secure a place in a nursing home that will never materialise.
In Shanghai last month, police arrested 11 people in connection with a fraudulent insurance scheme that used various inducements to persuade the elderly to part with more than Rmb20 million (€2.6 million).
“The middle-aged and elderly should increase their awareness of financial risk prevention and learn more about investment knowledge. When it comes to investment and financial management or large personal capital expenditure of the family, do not be blindly tempted by high returns,” the local police said after the arrests.
Convicted fraudsters can face years in prison with the most serious offences getting a life sentence but China’s ageing population and abundant savings offers fertile ground for fraudsters. Police urge children to be more vigilant about their ageing parents’ financial affairs but my friend is sceptical.
“I told my mother she should talk to me before they do anything about money but they are impossible. What can I do?” he said.