March 2022
Did you know that, as well as being the regulator of the insurance industry, the IA also serves as the frontline regulator of registered Mandatory Provident Fund (“MPF”) intermediaries who (a) carry on MPF sales and marketing activities incidental to their main insurance activities; and (b) are themselves regulated by the IA for the insurance activities they carry on?
As a frontline regulator, the IA investigates suspected non-compliances with performance requirements under the Mandatory Provident Fund Schemes Ordinance (Cap. 485) (“MPFSO”).
In our work as frontline regulator we wish to draw the public’s attention to the following scam, where potential fraudsters seek to impersonate MPF intermediaries for ill-gotten gain. Here is how the scam works:
Social Media
Fraudster pretends to offer you a way of withdrawing your MPF monies for investment with an investment company offering better return
Complete withdrawal Forms
Fraudster meets with you and hands out business card with a “licence number” on it and helps you complete MPF withdrawal forms
Payment
Fraudster later meets you at your bank, pretends to have transferred your MPF money into your bank account and asks you to withdraw the cash and pay it to him so his investment company can invest it for you
A fraudster posing as an MPF intermediary advertises through social media pretending to work for an “investment company.” The “investment company” purports to offer a service advising people how they can make a full withdrawal from their MPF account with their MPF provider (who the MPF intermediary represents) by completing forms falsely indicating their permanent departure from Hong Kong. The “investment company” can then invest the amounts withdrawn from the person’s MPF account and obtain a better return.
The fraudster feigns authenticity when meeting any potential victim who responds to the advert, by producing a business card with a “licence number” on it and official-looking forms for the person to complete. Once the potential victim completes the forms, the fraudster allegedly submits the forms to the relevant MPF provider to complete the withdrawal process.
A week or so later, the fraudster arranges to meet the potential victim again at the victim’s bank. The fraudster informs the potential victim that he has just transferred the withdrawn MPF monies to the victim’s bank account. All the victim has to do is withdraw the amount in cash, and pay it over to the fraudster with a 10% service fee so the investment company can start investing the monies. Once the victim pays the money over, however, the fraudster disappears.
DON’T FALL FOR IT! REMEMBER:
MPF intermediaries usually have to follow strict restrictions imposed by the MPF providers they represent in relation to using social media to advertise. So, if an advert on social media is offering something that is too good to be true, it usually is too good to be true. Don’t respond to it!
Contact the MPF hotline of your MPF provider or the Mandatory Provident Fund Schemes Authority (“MPFA”), to seek verification about any service being offered which appears to be suspicious.
Check the registration number of the MPF intermediary (the “subsidiary intermediary”) and the MPF provider he or she claims to represent (the “principal intermediary”) from the Register of MPF Intermediaries on the MPFA’s website, to ensure all the information is authentic. Again, consider contacting the MPF provider directly to verify the authenticity of the service, if you are suspicious.
Always be suspicious if someone is asking you to pay over to a sum of money in cash. And as a general rule: never pay over cash to someone purporting to be an MPF intermediary. You could be putting your money at risk!
If someone says they have transferred an amount to your bank account, check the transfer has gone through first.
Fraudsters may also try to reach out to the public through other channels, such as cold calls, apart from social media.
The scam set out in this article involves the victims participating in potential illegal activity by making false declarations to withdraw monies from their MPF accounts. Fraudsters prey on this, believing that victims will be reluctant to report the fraud to the police. Always remember, that the best way to avoid these types of fraud is not to get involved in the first place.