In Hong Kong and Asia Pacific during 2021 and the first two quarters of 2022 we have seen a significant rise in various online scams. The South China Morning Post has reported combined victim loses of 100’s of millions of HK dollars during that period.

Over 70% of the enquiries we receive at Futurum Asia to investigate online fraud are focused on:

Crypto Currency Broker Scams- A very common scam whereby most victims are seeing ads on social media platforms like Facebook, or through other paid Ad methods, and promised simple trading processes with high returns. Normally the returns offered are too good to be true!

Some fraudsters use the trading platforms Metatrader 4 (MT4) and Metratrader 5 (MT5) for simulation purposes, which then gives the appearance to the victims that these are legitimate trading platforms.

Tell-tale signs can include poorly executed trading applications with many spelling mistakes and grammatical errors, very persistent sales persons or others who pretend to be users, and showcase their trading successes to entice more victims.

A usual tactic that fraudsters use is that they prey on the victim’s cognitive biases, a particular one is called the ‘Loss Aversion Bias’. This is where the psychological pain of losing the opportunity to invest is twice as powerful over the potential future risk in investing, i.e. losing all of their money to the scam or not actually receiving any profit or gains as promised.

Part-time Jobs, earning commission for data entries or promoting- Victims are generally contacted when they are attempting to apply for part-time work on social media. They are specifically targeted as the part-time role seems simple, flexible and offers a high income for relatively easy work. Where in fact if it was really that easy to perform this role they would have very little reason to advertise this great opportunity.

The process is where the job seeker is asked to set up an account, deposit some funds and then perform a set number of tasks. They will be told they have not completed the allocated tasks and need to deposit more to receive their income. Any genuine part-time role will not ask you to deposit funds to earn money.

The Top-up Scam- This applies to both the crypto and part-time job scam. Once the scammers have you hooked, and perhaps given you a little flavour of the potential high returns or income you can receive they will state you need to top-up your funds to hit a threshold, pay taxes or match the anticipated returns.

At this point they have you trapped and you feel a real fear of losing your initial investment. Remember this is just a continuation of the scam and they are looking to ‘bleed your dry’ of all of your money. Paying more into this scheme will never release your pot of money!

The Road to Recovery

The difficulty with attempting to recover victims money with these types of scams is that:

• the perpetrators are commonly working remotely outside the country of where the victims are;
• they provide pseudonym or fake information to their victims;
• create whatsapp groups where everyone else within the group is involved in the scam.

Transactions are facilitated through crypto wallets or a straw man account, where the straw man could be another victim within the chain who is paid a small commission to facilitate the transactions. The fraudsters constantly change the accounts used and the straw man, thereby if the police catch up with someone they will have likely been coerced into having their account used for this purpose.

If enough information can be found out about the fraudsters, and you can get an actual location of where they operate from, an attempt of recovery is far more likely.

The Importance of Background Checks

Prior to open your purse or wallet to a potential scam it is worth performing some simple searches on the opportunity. Here are some of our top tips:

• Look for the investment opportunity through a search engine enquiry- no information on the company, poor customer reviews or 100’s of recent positive reviews from reviewers with only one rating is Red Flag 1;
• Constant chasing from the sales person or introducer telling you, you will miss the opportunity is Red Flag 2;
• Look at similar schemes, find the genuine ones and compare the returns. If the returns offered to you appear excessively overinflated, this would be Red Flag 3.

Futurum can conduct extensive background checks starting from HK$4,000/US$500 which will give you the peace of mind to make a sound investment. Our fees depend upon the complexity of the investment scheme, however most checks only require a standard background check being performed.