Investment Scams via Social Media: Danger Lurks in Easy Moneymaking Schemes

Editorial

15:13 JST, August 2, 2024

Criminal groups that are trying to exploit social media to swindle people out of their money are rampant. It is important to not listen to claims of easy moneymaking investment opportunities.

According to the National Police Agency, 3,570 cases of “social media-type investment scams,” in which false investment opportunities are offered through social media, were confirmed nationwide from January to June this year. Compared to the same period a year earlier, this represents about a six-fold increase in cases and a more than seven-fold increase in the value of the damage to ¥50.6 billion.

A prominent practice is one in which perpetrators claim to be investors or prominent figures to gain people’s trust. Of the victims, 70% were in their 50s to 70s, and their retirement funds were targeted.

Most of the victims are directed to Line from advertisements on Facebook. They communicate directly with the perpetrators about their investments on multiple occasions and are eventually swindled out of their money under the guise of investment funds and commissions.

For the criminals, social media is a convenient tool to hide their true identities and contact potential victims. The fact that many people are now accustomed to conducting business transactions online and are not very reluctant about sending money to strangers may be a factor in the increase in the scale of the damage. This is a serious situation.

When phrases such as “You will definitely make money” or “I will only tell you” appear, it must be suspected as being a scam. It is important to keep in mind that there is no easy way to make money.

So far, more than 90 people connected to two groups of social media-type investment scams based in Osaka City have been arrested. Most of the suspects are young people in their 20s. In many cases, they reportedly joined the groups after being invited by acquaintances who told them about a good job opportunity, among other reasons.

The suspects would gather in a room of a building and use their smartphones to send messages to people they thought might be interested in making investments. These roles are called “uchiko” in Japanese.

To the criminal groups, uchiko are nothing more than sacrificial pawns. Fraud is a serious crime with a punishment of up to 10 years in prison. If their future is ruined over a small reward, such roles as uchiko would not be worth doing.

Criminal groups in which members are linked by social media and repeatedly form to commit crimes and then disperse have been called “tokuryu,” or anonymous and fluid criminal groups, by police. The police have become more watchful of such groups. They are a new type of organization that differ from conventional organized crime groups.

The government has come out with measures to prevent damage from such fraud, requiring social media operators such as Meta Platforms Inc., the operator of Facebook, and LY Corp. to strengthen their screening of advertisements. The operators bear a heavy responsibility. The effectiveness of these measures will be tested.

To deal with tokuryu, whose methods are becoming more sophisticated, it is essential to cooperate not only with the police and social media providers, but also with financial institutions involved in opening accounts and sending money, among others.

(From The Yomiuri Shimbun, Aug. 2, 2024)