Vietnamese ministry warns public about online stock market investment scams

Posing as securities experts, several scammers are enticing people to join closed groups on social networks, access web links or install apps for stock investment, the Ministry of Public Security (MPS) warned.

Ministry spokesman Lieutenant General To An Xo said at the government's regular press meeting on Saturday that the scammers, taking advantage of people’s greed for profit and lack of knowledge, would make calls claiming to be employees of famous securities companies and invite people to join group chats and online stock investment courses.

Once the victims joined chat groups or closed groups, the scammers introduced investment opportunities with high profit, including chances for investors to buy Vietnamese tickers at lower than market prices. To avail of these opportunities, prospective investors would have to access web links or install apps on mobile devices.

After registering accounts on websites or phone apps, people would be urged to participate in online investment groups designated for each potential code. The “experts” would explain that because well-known, legal financial investment funds were affiliated with securities companies, they would receive high support and incentives; or the enterprise would issue private placement shares or shares under the employee stock ownership plans (ESOPs) that the investors could buy at well below market prices.

To win prospective investors’ trust, the scammers would provide legal documents of investment funds such as establishment certificates issued by the State Securities Commission, business licenses, certificates of custodian banks, and bank accounts bearing the name of the company and investment fund, Xo said.

The scammers would also promise high interest rates, compensation in case of losses and a price discount of 15%-30% through investment funds. Typically, the prospective investors would check and find matching information on the internet. This would motivate them to trust the legal documents provided by the scammers.

Xo said many people who deposit money into the apps would initially earn profits many times higher than their principal investment in just the first few trading sessions. They would also be shown many profitable accounts of other investors (virtual nicks created by them). These would be virtual transactions aimed at winning trust and enticing the victims to deposit more money into their investment accounts.

However, when they tried to withdraw their money, the app would report an error or mention a failure to meet the fund's matching limit. At this time, the scammers would convince people to transfer even more money to their accounts to get back the amount they’d deposited earlier. Many who’d already transferred large amounts of money to their accounts would be told that they could lose it if they did not make more transfers.

Once, it became evident that the victims could no longer transfer more money, the scammers would disable their accounts. The investors would no longer be able to log into their accounts and withdraw their money.

By the time the investors realized that they’d been swindled, they would have been removed from chat groups and blocked.

“The current verification and tracing work faces many difficulties because most chat groups have addresses outside Vietnamese territory,” Xo said.

He advised the public not to be enticed by the prospect of making high profits in cyberspace, especially if they did not understand securities trading. They should never join group chats or deposit money in websites or apps without confirming beyond doubt the identity and information about the hosts, he said.

“It is necessary to find information from many sources, especially official channels such as the website of the State Securities Commission and those on finance and banking. If people have investment needs, they can choose stock trading platforms licensed by the state,” he said.

People finding or suspecting any sign of fraud should immediately report it to the nearest police station for timely support and follow up action, he added.