Old lesson, new tragedy

In the digital age, financial investment opportunities seem to flourish more than ever, but along with that are dangerous traps set by sophisticated scammers.

The recent case involving TikToker Mr Pips – Pho Duc Nam and TikToker Mr Hunter – Le Khac Ngo, scammers who have appropriated trillions of VND from thousands of investors, is clear evidence that old lessons about financial fraud are still not enough to prevent new tragedies.

The development of technology and online international financial trading platforms has clearly opened the door for many people to access investment channels that were previously reserved for professional investors.

In the context of economic fluctuations, when bank deposit interest rates hit rock bottom, making savings no longer attractive, gold prices continuously fluctuated from record highs to plummeting, and domestic stocks were gloomy, a large amount of money flowed to many places in search of attractive investment channels.

Many people, from ordinary people with little knowledge to those with capital and business experience, have started looking for new investment channels, hoping to gain high profits in a short time.

It is in this context that investment "opportunities" like Mr Pips' system appear and quickly gain trust, blinding many people.

When the case was brought to light, public opinion was shocked by the figure of over 5,200 billion VND in assets that the authorities seized from Mr Pips' system: dozens of luxury cars filling the yard, stacks of gold bars, dollars... And that was just a part of the assets that they had defrauded from more than 2,600 victims, including victims who were defrauded of over 40 billion VND.

The online financial investment scam has been exposed through many previous cases, warned by experts and the media, and the Ministry of Public Security has even issued a handbook to warn people, but thousands of people still fall into the trap, miserable because of losing property and falling into debt. The reasons must include both objective reasons from the trappers and subjective reasons from the victims.

High-tech criminals like Mr Pips have taken their scams to a new level, with the sophistication and methodical nature of an entire system.

They invest heavily in building a "professional" image. From a glossy website, an English interface, "luxury" as real, to "expert" consultants who dress politely, speak convincingly, and even Mr Pips' personal image with a lavish lifestyle as a famous Tiktoker, all are aimed at deceiving the victim's vigilance.

Not only using the traditional trick of committing "huge" profits and promising to join hands to "push the boat to shore" to stimulate greed, the scammers also use a series of tricks to manipulate the victims' psychology, erase their initial doubts, build trust and stimulate "pouring money".

They exaggerate the urgency of the investment opportunity, “limited opportunity, if you don’t participate now, you will miss it”; display huge profit figures from “fake” accounts, or “success stories” from investors, post many seeding accounts in chat groups to act as co-investors, to create the feeling of having a companion…

On the victims’ side, although more and more people are interested in investing, not everyone has enough financial knowledge to distinguish between legitimate investment channels and fraudulent models. Even people with education or business and investment experience are not immune to sophisticated and well-designed fraud schemes.

In addition, in the context of economic difficulties, traditional investment channels do not bring expected profits, many people want to look for quick-profit investment opportunities, making them easily ignore warning signs, such as unrealistic profit levels or lack of transparency in the business model.

Coupled with the crowd effect, when many people around participate and report profits (even if fake), the "fear of missing out" mentality also stimulates victims to rush in without checking carefully enough.

After a series of forex (foreign exchange) scams in recent times, the Tiktoker Mr Pips case continues to expose alarming dark corners in online financial investment activities, and leaves lessons, although not new, for investors, regulators and society in general.

For investors, it is always important to remember the basic principle of investing that profits always come with risks. Any offer that promises high profits without risk is a sign of fraud. Investing without understanding the investment channel, product or market is putting yourself at risk.

Investors themselves need to equip themselves with investment knowledge and before participating in any investment channel, need to cross-check many sources about the transparency of the business model, legal certifications; and importantly, keep a "cool head" with all financial decisions.

For authorities, it is necessary to increase propaganda and update warnings about financial fraud because warnings always seem to be insufficient.

One example is that while the shocking news about Mr Pips – Pho Duc Nam was still “hot” on the media, recently, on December 12, a woman in Hanoi became a victim of a virtual currency investment scam with the amount of money stolen up to 9.4 billion VND. There is even a scam “helping to get money back from Mr Pips”!

The Tiktoker Mr Pips incident is not only a warning bell but also an opportunity for us to review our approach to investment in the digital age - an era that opens up many new horizons for investment activities, but also comes with countless risks if participants do not equip themselves with enough knowledge, courage and insight.