Online investment fraud in Hong Kong has reached an all-time high. In the first nine months of 2023, the number of online investment scams reported in Hong Kong soared to an all-time high, with more than 3,500 cases causing losses of HK$2.1 billion.
Police are warning residents of an increase in the number of fake chat groups, where scammers pose as stock commentators or celebrities to lure victims to fake investment platforms. One victim lost HK$490,000 after joining a Facebook chat group that claimed to provide investment advice from a well-known stock commentator.
Chan Shun-ching, director of the Cyber Security and Technology Crime Bureau of the Hong Kong Police Force, said: "Victims usually get some reward at first, but once they want to withdraw money after investing a large amount of money, the scammers will ask for high fees or claim that the platform Services have been discontinued and victims will suffer huge losses.”
In the first nine months of this year, reports of online investment fraud cases received by the police surged 168% to 3,523 cases, compared with 1,315 cases in the same period last year. The amount of losses increased by 225%, from HK$656 million in the first nine months of 2022 to HK$2.1 billion this year.
In the past nine months, police have arrested 4,190 people in connection with such scams and reported more than 6,860 suspicious pages and accounts to Internet service providers for removal or blocking.
In the first three quarters, Hong Kong’s online investment fraud cases reached an all-time high. Reported cases mostly occurred on social media apps.
After a surge in cases, the police reminded the public to be wary of WhatsApp accounts being hacked. In the first nine months of this year, 60% of reported cases occurred on WhatsApp, 20% on Facebook, and 11% on other platforms including dating apps. More than half of the victims invested in local and overseas securities, while 30% invested in cryptocurrencies.
Tan Soon Ching said online scammers have changed their tactics over the years, from romance scams that take longer to build relationships with victims, to investment traps that can trick people faster. Among the victims was a female employee in her 40s who lost nearly HK$500,000 in three months after she joined a Facebook chat group in August that claimed to provide investment advice from a well-known stock commentator.
The woman, surnamed Chen, was a novice investor and said she initially lost some money because of the tips. But she was persuaded to join an investment plan called the "688% Winning Money Plan", which promised returns of 3% to 14%, and ended up losing HK$490,000 in nine transactions as she desperately tried to recover past losses.
"I was definitely affected by my own emotions. But a commentator named Lin appeared in front of the camera to provide tips and would post warning us not to trust other websites that recommended A-shares or mainland stocks," Chen recalled.
In the first three quarters, Hong Kong’s online investment fraud cases reached a record high. Be wary of false investment advertisements online.
Tyler Chan Chi-wing, senior inspector of Hong Kong's Cyber Security Bureau, said scammers often run ads to promote their fake investment groups and websites, while using photos of celebrities or offering extremely high returns to attract members to join their groups.
He urged residents to search the investment group’s account records in the “Page Transparency” section of any Facebook page to check their legitimacy. Information such as the date of establishment, location of the administrator, number of posts, ad history, and whether there is official blue check verification will help users identify suspicious websites.
Red flags include a recent founding date, a record of irrelevant posts and overseas managers posing as local celebrities, Chen said.
Regarding online chat groups, the senior inspector urged residents to look out for duplicate profile pictures in member lists, comments that unanimously praise a certain commentator, links to downloads of unknown investment platforms, and to be wary of videos of celebrities.
Michelle Yeung Wai-yee of the Hong Kong Investor and Financial Education Bureau urged residents to learn about investment products from multiple sources before making any decisions. “In the past, if we had to trade, we had to go to the bank. This was a time-consuming process, but it gave investors time to reconsider their investments. I would like to remind everyone that there is no need to make a decision so quickly, We can stop and think about whether we should make this decision."
The number of online investment scams in the first three quarters of this year exceeded the total for the whole of 2022, and also exceeded the total of the past four years. The police handled 1,884, 980 and 544 cases in 2022, 2021 and 2020 respectively.
