Anatomy of an (alleged) online scam

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Your little daughter got diagnosed of leukemia. The medical bill is substantial. You are anxious. You pray to God. You start to write your feelings down in your private blog on WeChat. Friends read your posts and are touched. At the bottom of your posts WeChat has activated a “appreciation” button allowing users to give the author money as a token of support. Some of them begin to press the button enthusiastically. Before long your posts attract an expanding readership, until one day one of your posts gets viral.

The rest is legend.

Luo Er, the father who blogged about his kid under intensive care, Luo Yixiao, received more than 2.7 million RMB in donation (about 400,000 USD) in less than 72 hours. The tens of millions of total strangers visiting his blog almost caused a virtual stampede at the “appreciation” button. WeChat sets a daily ceiling of 50,000 RMB for the amount of “appreciation” a single blog post can receive, which, in the case of Luo Er, was hit in a matter of minutes. Desperate good-wishers then moved on to his other posts and showered him with money until ceilings were hit one after another. The outburst of empathy refutes any preconception about the Chinese society being apathetic.

The button is called “appreciation”, instead of “donation,” for a reason. The intention is to incentivize good original content generated by users, not to channel large chunks of cash to a cause or someone who needs help. That’s philanthropy’s role. The blurring of that line in this particular case underscores social media’s disruption of established practices and norms in both blogging and charity.  

The case is also a vivid illustration of the volatility of the Chinese cyberspace and some of its driving forces. Within that same 72 hours, an emotional whirlwind would sweep across the Internet.  Luo Er’s public image would undergo a 180 degree downward turn, a free fall from the high moral pedestal of a loving father to the cold hard floor of an internet villain that everybody spits on.

The piece at the epicenter, which Luo posted on Nov 25, is titled “Luo Yixiao, you stop there!” It describes the unsettling days that Luo spent after his little girl was moved into ICU, going in and out of the hospital, soothing his wife, and handling medical bills that were rapidly building up. At the end of it, Luo, a small-time magazine editor, plays a literary trick by bringing in his daughter in the second person. In a supposedly loving tone, Luo writes, “If you do not stop there, I will chase you down in heaven and scold you there for being naughty.” The trick works, apparently, which explains the initial success of the post among his WeChat friends.

What transformed that post from a semi-private expression of emotions to an instantaneous nationwide hit was a little marketing support it got. Luo’s friend Liu Xiafeng, a former staff of his and the boss of a social media marketing firm, wanted to offer some help. But, according to Luo’s own account, he had too much pride to accept money from Liu directly. So Liu proposed a way that would take care of his dignity: Liu’s corporate WeChat account would republish the blog post and ask people to retweet it in their own WeChat circles. For each one retweet, the company would donate one RMB to Luo Yixiao. A 500 thousand ceiling would be applied. Luo happily obliged.

On Nov 27, the piece began to spread like wildfire on people’s WeChat walls. Later, Liu revealed that 96 million people might have viewed it. The you-retweet-I-donate set-up certainly lowered the threshold for participation. The phenomenon prompted commentators to caution peopleabout their urge to “act like a good person” in front of their WeChat friends, a psychological tendency that had propelled so many such schemes before. 

There is no clearly verified account as to whether the whole thing is as noble and innocent as both Luo and Liu admit. After all, Liu’s company offers online marketing as a service and would benefit from the exposure that the retweets bring. An investigation by sohu.com would link the company to the marketing of commercial insurance plans for children, further casting questions about Liu’s motivation. There are also signs that indicate possibility of intentional manipulation: in the republished post, Liu added a full section at the beginning highlighting Luo’s precarious financial situation. His father was seriously ill back in his home town. His magazine was undergoing restructure, reducing his salary to a bare minimum. The medical bill of his daughter accumulated at a rate of 10 to 30 thousands a day, much of that uncovered by insurance. 

More experienced observers of social media would immediately spot discrepancies in the posts. Why was there no mention of the family’s exact funding gap? Usual calls for help, in order to gain trust, would often demonstrate that. Why didn’t they disclose any details about the girl’s condition, besides the general term leukemia? What’s even more perplexing was Luo’s claim that he didn’t want to “burden the government” with her daughter’s medical expenses. Instead, facing what looked like a critical situation, he chose to play along with a “game” of retweeting. 

Most people were neither experienced nor close readers of a WeChat post. The vagueness in the posts might have actually helped with their spread. Readers identified with an imagined vulnerable middle-aged father, barely hanging there with his severely diminished stream of income. His plight felt real for many who also face the insecure sandwich-like situation, squeezed from above (ailing parents) and beneath (sick kids). But as some would point out, the public might also had been captured by an outdated image of leukemia as a deadly decease perpetuated by pop culture. “Modern medicine has advanced to a point that major types of leukemia now have a 5-year survival rate of 60-85%.” What’s also likely is that people underestimate public health insurance in a city like Shenzhen, where the family live. Soon there would be revelations that much of little Yixiao’s medical bill, probably as much as 80%, could be covered by the government.

Trackers of the Chinese cyberspace began to locate the case in the not-too-long history of Internet scams in China. The earliest one on record happened in 1995, when the World Wide Web was just before the dawn of its exponential growth in the country. At China’s largest online forum at that time, where most of its frequents were researchers and graduate students, someone raised money for a non-existent “abandoned kid”. Instead of being offended, those well-intentioned internet users laughed it off as China’s earliest online prank. Things got much more malicious later with deeper penetration of internet into social life. In the aftermath of the Sichuan earthquake in 2008 that killed more than 80,000 people, fraudulent SMSs flooded people’s mobile phones soliciting donation for fake quake victims.  

The advance of social media further transforms such scams. New story-telling potentials unleashed by a slew of technology advancements enable those with a narrative talent to increase the power of their tales by orders of magnitude. And once viral, those stories develop a life of their own and become very hard to stop. 

Marketers quickly learn to cash in on the new trend. Driven by the need to please advertisers or venture capitalists, they prey on people’s goodwill by devising marketing campaigns and sophisticated click-baits under the disguise of social causes. 

One of the most inexplicable recent cases of such click traps is a 2015 message on WeChat that called for the indiscriminate execution of child traffickers upon arrest. Chinese parents are terrified by stories of child snatchers, and their intense love for their kids easily turns into a blind hatred of whoever poses a threat to their beloved. The petition-like post collected so much steam online that the Supreme Court of China felt the need to respond by saying that execution doesn’t solve the problem. Later it turned out that a dating website was behind the whole thing to boost its click numbers. 

On the spectrum of authenticity, Luo’s probably sits right in the middle of out-right fraud and impeccable honesty. The kid’s illness is real, but Luo was not upfront with his financial situation for reasons only he knew. Did he intentionally mislead his readers so that he might reap extra sympathy (and money) from them? Or, as a distressed father, was he simply careless to have not included precise financial details? Those nuances are important to understand the nature of the case but before they could be explored, a massive backlash would drown out everything. 

The opaqueness of Luo’s finances, while helping him to gain initial public support, quickly became a liability. As donation skyrocketed, information about Luo’s material wealth started to circulate on the Internet. People dug out old posts in his blog showing that he might own up to three apartments in the prosperous cities of Shenzhen and Dongguan, both bordering Hong Kong.

The revelation of his real estate ownership proved devastating. Ironically, the person who benefited from online perceptions and imaginations would then immediately step into a mental minefield. In a country that is hyper-sensitive about housing prices and treats real estate ownership as the ultimate symbol of social status, the idea that someone with three apartments still tried to raise money from strangers irritates people. Almost overnight, the Internet that initially embraced the family with sympathy and love turned against it with harshness and hostility. News headlines fixated on the three apartments and journalists grilled the duo with questions about Luo’s material wellbeing.

Major online personalities quickly banked on such a turn of event to fan the flame of public anger. Their line of questioning followed the obsession with real estate: why didn’t he sell off one of his apartments to save his daughter? When Luo publicly defended himself by explaining the constraints he faced and the difficulties in liquidating his assets in short notice, he was accused of an even more hideous sin: that deep down, he did not consider the girl worthy of major financial sacrifices. The extrapolation played into an entrenched resentment of a backward Chinese mentality that favors boys over girls. Opinion leaders were enraged about Luo’s perceived slight of his daughter, despite all the loving words he’d filled his blog with.

The public’s violent mood swing over this affair troubled those who care about the future of online philanthropy. They fear that people would lose faith in subsequent calls for help from individuals, harming those who are genuinely in need. In 2011, a woman named Guo Meimei, who self-claimed as a Red Cross Society affiliate and boasted about her luxurious life style on Weibo, ruined the Red Cross Society’s reputation which, until today, never fully recovered. With such considerations in mind, Deng Fei, star journalist and the founder of multiple online philanthropic initiatives including the wildly successful “Free Lunch” project for poor rural kids, set out to “set the record straight” in an attempt to restore trust in the overall online environment for charity. He intended to bring the facts and nuances back into the discussion, feeling that the public was driven too much by conjecture and imagination. He and a few friends investigated the case, interviewed Luo Er and came to the conclusion that he was simply a disturbed guy misguided by the potential of WeChat fundraising. All weaknesses, no malice.

Despite his stellar reputation, Deng’s findings were not convincing for others who were also looking at the facts closely. Wang Zhi’an, an investigative journalist for CCTV, did the math and found that Luo had probably earned enough “appreciation” money for Yixiao’s medication even before Liu’s company launched its fundraising campaign, and that he should have learned about Yixiao’s insurance coverage situation in September. Smoking gun of a pre-contemplated scheme.

Those fact-based discussions could have greatly calibrated Luo’s presentation of his situation, giving readers considering donation a much more completely picture of his motivation and financial situation. Yet they came 72 hours too late. The absence of such fact-checking in the early stage of the saga is, to some, the symptom of a gate-keeping-free era of social media.

Public rage finally accumulated to a point that both the government and Tencent, mother company running WeChat, felt the need to intervene. Originally, Luo and Liu proposed to set up a foundation for children who have leukemia with the excess money they had raised. But the public did not trust them with money anymore. So Tencent came up with a technical fix that allowed WeChat to return all the 2.7 million to every single users who pressed the “appreciation” button.

The fix was not without its critics. Even to this point, there are people who, half-sarcastically, insist that Luo Er was simply rewarded for his touching writing. According to this view, the public was essentially paying for an “emotional massage”, not making donations. Forcing the total return of such money of “appreciation” violated the sanctity of a private expression of support.

Mavericks aside, the episode raises the fundamental question of ethics in an age of social media: how should people treat such calls in the future? Are wealthy people ever justified to raise money publicly for emergency? The answer is yes, writes commentator Yao Yao, as long as they are transparent about their situation. The case highlights the need for vetting mechanisms and professional organizers of philanthropic resources. The worthiness of someone for charitable support should be based on actual needs, not one’s ability to tell heart-wrenching stories.

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One thought on “Anatomy of an (alleged) online scam

  1. The part of Luo’s perceived slight of his daughter could use more elaboration. In a TV interview the father explicitly stated the reasons for not selling his properties. He’s keeping two of them for the retirement of himself and his wife, while the third one is reserved for his son. I don’t have a link to this interview at hand, but it was featured in one episode of The Jinxing Show.

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