Over 700 reports have recently been filed with HCMC police by thousands who have been tricked by smartphone app Coolcat . The extent of fraud is estimated at VND200 billion ($8.7 million), the police said.
This is just one of many apps that have made their appearance in Vietnam recently, aiming to trick investors with promises of quick and easy profits.
Over 160 investors this month claimed to have been tricked by Bounty, a website that rewards users with money if they interact with online vendors on social media, such as liking a post on Facebook of subscribing to a YouTube channel. There are 10 levels of users, and users up their levels by putting in more money, which will allow them to complete tasks with higher profits.
Ngoc, an investor, was able to gain VND1.4 million ($61) in just a few days, so she decided to invest a total of VND194 million in the platform and invited others to join.
But on April 24, Bounty investors started to leave the groups and stopped posting on social media; and three days later, the website interface was changed from Vietnamese to Chinese.
Ngoc lost VND154 million in 10 days.
Another platform, Lifeshop, allows users to make money by placing fake orders on online shopping websites. By placing 12 orders a user can make VND25,000, but he or she can make more by spending money to advance to higher levels.
Similarly, an app called Lucky Money offers commissions of 1-5 percent for each task a user completes, without providing any information about the company behind it.
Hatching eggs apparently can make money too, with the app TamaGo promising 5 percent interest in just eight hours if investors put in a sum of money to “hatch” a digital egg.
Promoters of the app say it is developed in Singapore and is being welcomed in Japan and South Korea, but offer no statistics or other evidence.
“You will never lose,” they assert.
Dinh Trong Thinh, senior lecturer at the Academy of Finance in Hanoi, said that many investors are drawn to this kind of investment because they think they can withdraw early without making losses.
This business is not regulated in Vietnam and investors have to engage in them at their own risk, he said.
Early birds might make some money with these platforms, but later investors will likely lose, he added.
Ngo Tan Vu Khanh, a faculty member of University of Economics Ho Chi Minh City, said that creating an app is very easy these days. Whenever a suspicious app crashes, another will replace it. Developers can even make several such apps with some adjustments of users interface to lure new investors in, he said.
Until there is a legal framework to regulate such apps, users should not invest in them as the chance of losing money is very high, he added.