The Financial Supervisory Service issued a consumer alert and urged investors to exercise particular caution, saying a new type of illegal "reading room" scam that lures investors with feng shui and saju is rampant.
On the 11th, the Financial Supervisory Service (FSS) said it shared cases of damage from illegal reading rooms that it is currently investigating or that occurred recently and issued a consumer alert of "caution."
Recently, the Financial Supervisory Service (FSS), in collaboration with the Yeongdeungpo Police Station, identified indications that a financial fraud ring based in Vietnam created and distributed a new application to induce investments and embezzled funds.
After approaching on social media (SNS) with familiar content such as feng shui and saju, they first had victims deposit a small amount of 100,000–200,000 won into a fake stock trading app they developed themselves and manipulated it to generate returns dozens of times larger. They also allowed partial withdrawals to build trust, then used a method of gradually inducing large deposits. For investors who wanted to invest more but lacked funds, they arranged and executed loans.
Later, when investors who confirmed large returns on the fake app requested withdrawals, the scammers took additional funds under pretexts such as repaying loans, paying fees, and tax issues. The fake app, known as "PIPS Assets," masquerades as a legitimate financial and investment platform, making it highly likely that ordinary financial consumers will access it without recognizing it as a crime, raising concerns about further spread of damage.
A scheme that impersonates a global investment company, offers a small successful investment experience to build trust, then recommends buying large amounts of unlisted shares and disappears is still rampant.
For example, an illegal operator secured the means for fraud by pre-purchasing a large amount of worthless unlisted stock A, then impersonated a global investment company and approached the general public via SNS and other channels.
The illegal operator lured investors into an illegal reading room by enticing them with promises of personal finance tips, then handed out one share of unlisted stock B that was actually scheduled to be listed so they would not suspect that unlisted stock investments in the illegal reading room were a scam. The operator then sold unlisted stock A at a high price using false listing information as bait and went into hiding.
The Financial Supervisory Service (FSS) explained that someone who approaches with feng shui and saju on SNS and the like, recommends installing an app and buying stocks, or recommends buying unlisted shares while mentioning listing-related information and high returns is likely an illegal operator seeking to embezzle investment funds.
It also emphasized that there are cases of impersonating regulated financial companies, such as claiming to be officially registered with the FSS, so investors must directly verify whether the person recommending an investment is in fact an employee of a regulated financial company.
An FSS official said, "Regulated financial companies do not solicit investments in one-on-one chat rooms," and noted, "There are many cases where people write online articles or blog posts as the illegal companies want in exchange for a small fee, and you should be aware that damage from transactions with illegal companies is not subject to the FSS's dispute mediation, so relief cannot be provided."