The Online Investment Scam: How to Spot and Avoid It

According to the Vietnam Securities Depository and Clearing Corporation, domestic investors have opened nearly 1.73 million new accounts in the first ten months of this year, a staggering 4.4 times the number of accounts opened in all of 2023. As the number of investors surges, so do the scams in the stock market, with many falling victim to fraudulent schemes.

One victim shared their experience of being lured by a Facebook friend into investing in a self-proclaimed domestic stock brokerage firm, enticed by promises of high-interest rates. With an initial investment of over 30 million VND, they were able to withdraw small amounts of interest a few times. However, when they attempted to withdraw a larger sum, their money became “stuck,” and they were unable to retrieve their funds. The scammers pressured the victim to continuously deposit more money to reactivate their account, threatening the loss of their entire initial investment if they didn’t comply.

These scammers often employ “financial investment” schemes based on a distorted form of multi-level marketing. They create fake social media pages impersonating the Vietnam Stock Exchange, brokerage firms, and financial experts, posting articles encouraging investors to join training sessions and community groups for stock and cryptocurrency investments. The catch? Once you pay, you’ll never get your money back.

Image: A warning for investors as stock market scams surge in Vietnam.

In a brazen move, these scammers even impersonate well-known market experts to lure in more victims. Often, these experts are unaware of the scam until they are contacted by acquaintances or even victims seeking verification of the information.

Mr. Can Van Luc, Chief Economist at BIDV Bank, warns, “They use very attractive advertising gimmicks and personal information to increase credibility. They will offer investment opportunities, mainly in a multi-level marketing structure, and people get sucked in, losing their money with nothing to show for it.”

Mr. Le Duc Khanh, Analysis Director at VPS Securities Corporation, explains that these scammers target investors and individuals who lack understanding of the stock and financial markets. These unsuspecting individuals are more likely to engage with the scam by clicking links, liking posts, or interacting with the fraudulent page.

Financial investment experts advise individuals to be extremely cautious of investment offers promising abnormally high-interest rates compared to the market. It is crucial to thoroughly research the managing entity or company before investing. Additionally, enhancing one’s financial and investment knowledge can help prevent falling victim to such scams. If you suspect a scam, contact the police for guidance and support.