In August, Hong Kong police received 810 reports of online investment fraud, a monthly record, an upward trend that prompted authorities to set up an alert system. People familiar with the matter said that the police worked with the Monetary Authority and the Hong Kong Association of Banks to develop a payee blacklist and fraud alert system, which will be implemented in November.
Data show that so far this year, each victim has been defrauded of an average of HK$500,000 (US$63,800), and a police insider estimated that the losses caused by fraud in August may be as high as HK$400 million.
The high incidence of online investment fraud cases has prompted the creation of an alarm system
In a warning posted on its CyberDefender Facebook page on Monday, police said they had received 810 reports of online investment fraud in August, adding that the number was a record high and that the number of cases in August was equivalent to the first half of this year. Half of the 1,604 investment scams reported. In the first half of last year, 798 cases were recorded.
Fraudsters befriended 60% of the 810 victims via WhatsApp messages, then induced them to invest in stocks, precious metals and cryptocurrencies on fake trading websites or apps.
Hong Kong police received record number of online investment fraud cases in August
Hong Kongers are warning about WhatsApp scammers after 25 scams were reported in a week. A police source said that as the number of online investment fraud cases increased from 208 in 2017 to 1,884 last year, police had worked with the Monetary Authority and the Hong Kong Association of Banks to develop a blacklist of recipients.
The list is based on details of past cases and the scam alert program will begin in November, with plans to expand to transfers via online banking as early as the first quarter of next year, the person said. He said people transferring money to high-risk accounts through the bank's Faster Payment System (FPS) would receive an immediate warning.
He said police conducted data analysis on these cases and found that victims made an average of 50 to 100 transactions in one false investment transaction. Victims are often tricked into transferring money into designated bank accounts - either personal or business - using different names without realizing it. The purpose of this alert is to warn victims that if they attempt to transfer money to these high-risk accounts, they should think twice before receiving an immediate warning.
Last month, police warned of a number of online investment scams in which scammers pretended to be stock analysts and advertised on social media, claiming they used artificial intelligence software to pick investment options. Police said they then invited internet users to join chat groups on Telegram and WhatsApp, where "experts" shared inside investment information. The victim is then persuaded to set up an account on a fake trading website or app and invest in stocks from Hong Kong, mainland China and overseas.
Sources said intelligence showed that at least two fraud syndicates were conducting online investment fraud in Asian countries, targeting Hong Kong residents. From January to June this year, the police handled 18,743 fraud cases, an increase of 52% from 12,326 cases in the same period in 2022; and the losses in this year's cases reached HK$2.69 billion, an increase of 28% from HK$2.1 billion in the same period last year.
