Hong Kong authorities to use bank account blacklist, alerts system to tackle record number of online investment scams

A record 810 Hongkongers, or 26 a day on average, fell victim to online investment scams in August, with the rising trend prompting authorities to set up an alerts system that will warn people transferring money into blacklisted accounts, the Post has learned.

With figures showing each victim this year was conned out of HK$500,000 on average, a Hong Kong police insider estimated losses from scams in August could reach as much as HK$400mil.

The number of sham investment deals last month broke the previous record of 600 in July, when police warned that swindlers posing as investment experts had tricked victims into buying stocks they claimed were selected by artificial intelligence (AI) software.

Case numbers for August alone were equivalent to half of the 1,604 investment scams reported in the first six months of the year. In comparison, 798 cases were logged in the first six months last year.

Losses from such scams reached more than HK$800mil over the first six months this year, double the near HK$400mil recorded in the same period in 2022.

Police posted an alert on their CyberDefender Facebook page on Monday, saying the force had received 810 reports of online investment fraud in August, adding that the number was a new high.

Fraudsters befriended 60% of the 810 victims via WhatsApp messages before luring them into investing in stocks, precious metals and cryptocurrencies on bogus trading websites or apps.

Police said no actual investments were made and all the money went directly into the scammers’ hands.

A police source said that as the number of online investment fraud cases had risen six-fold from 208 in 2017 to 1,884 last year, the force had worked with the Monetary Authority and Hong Kong Association of Banks to produce a blacklist of payees.

The list was based on the details of past cases and a scam alert scheme would run from November, the insider said.

He said an instant warning would be sent to people who transferred money to high-risk accounts via banks’ Faster Payment System (FPS).

The source also revealed that the alert scheme would be extended to money transfers via online banking as early as the first quarter next year.

He said the force had conducted data analysis into the cases and found victims made an average of between 50 and 100 transactions in a single sham investment deal.

Victims were usually tricked into transferring money into designated bank accounts – either personal or business – under different names, but they did not realise it, he said.

“The purpose of this alert is to warn victims if they attempt to transfer money into these high-risk accounts. When they receive an instant warning, they should think twice about proceeding with the transfer,” the source said.

He urged residents in the meantime to utilise the force’s Scameter search engine, accessible via the CyberDefender website, to check for scams.

It provides information to help the public identify suspicious web addresses, emails, platform usernames or IP addresses.

Another source said bank accounts and mobile phone numbers used in previous scams had also been input into the Scameter, which could help people avoid falling for online swindles.

Last month, police warned that in some online investment cons, swindlers posing as stock analysts posted adverts on social media, claiming they used AI software to hand-pick investment options.

They then invited internet users to join chat groups on Telegram and WhatsApp, where “experts” shared inside investment information, according to the force.

Victims were then persuaded to set up an account on a bogus trading website or app to invest in stocks from Hong Kong, mainland China and overseas.

The source said intelligence indicated that at least two fraud syndicates were operating online investment fraud from Asian countries and targeting Hong Kong residents.

Police handled 18,743 deception cases between January and June this year, an increase of 52% from 12,326 logged over the same period in 2022.

Losses from cases this year reached HK$2.69bil, up 28% from HK$2.1bil recorded in the same period in 2022. – South China Morning Post