The Securities and Futures Commission (SFC) has concluded an online campaign which simulated the experience of being drawn into an investment scam. The campaign is part of the SFC’s ongoing efforts to alert the public about the use of online platforms to defraud investors.
Web banners featuring language commonly used to lure potential victims to join scam-related chat groups were posted on local discussion forums, mobile investment applications and financial news websites over a three-week period in April. The banners targeted web users with an interest in stock trading and other investments.
Viewers who clicked on the banners were directed to a webpage in Chinese where the SFC warned that unsolicited offers of stock tips and other investment advice are often signs of ramp and dump scams (Note 1).
“Online investment scams may involve stock market manipulation and those who get caught up in them can suffer substantial losses,” said Mr Ashley Alder, the SFC’s Chief Executive Officer. “Investors should stay vigilant and make informed investment decisions rather than relying on stock tips circulating in chat groups or on social media platforms.”
Estimated demographic data collected on an anonymous basis indicates that, of the more than 24,000 viewers who clicked on the banners in the SFC’s online campaign, about 50% were under 35 (Note 2). Younger people may be more vulnerable to these scams. Less experienced investors are urged to carefully consider and verify the information they read online before they invest.
In recent months, the SFC has warned the public about online scams in media interviews and its official Facebook page. It has also worked closely with the Hong Kong Police’s Anti-Deception Coordination Centre to produce short videos and hold community outreach events to raise public awareness.
Practical guidance on how to identify the warning signs of investment scams is available from the Investor Financial Education Council, an SFC subsidiary.
Notes:
- A ramp and dump scam is a form of stock market manipulation where fraudsters "ramp" up the price of a stock and use social media to lure unwary investors to buy at an artificially high price. The fraudsters then sell or “dump” the stock to take profits causing the price to collapse. The SFC explained how these scams operate and provided tips for avoiding them in an issue of its Enforcement Reporter.
- The campaign targeted adults aged 18 to 65 in Hong Kong. The largest number of viewers were estimated to be in the 25-34 age group (31%), followed by 55-64 (23%), then 18-24 (19%), 35-44 (14%) and 45-54 (13%).
