When people think about losing money investing, they picture a market crash. A chart falling off a cliff.
For most households, the larger risk is quieter: a message on a phone, an advertisement with a familiar face, a chat group where everyone seems to be making money.
Taiwan's interior ministry reported that in the last quarter of 2024, NT$37.19 billion was lost to fraud. Of that, NT$21.16 billion, or 56.9%, was lost to investment scams, many of which began with fake social-media advertisements and messaging groups on LINE.
A market loss comes back when the market does. A transferred balance does not.
Why scams work on capable people
These losses are not mainly about gullibility. The patterns exploit well-understood habits of judgment:
- Social proof. A group chat full of people sharing profits makes a claim look verified. Many of the participants are part of the scheme.
- Borrowed authority. A familiar name or face, often used without permission in a fake advertisement, stands in for diligence.
- Small early wins. A first withdrawal succeeds, which builds trust before a much larger deposit.
- Urgency and scarcity. "Closing this week." "Limited slots." Time pressure removes the moment you would have used to check.
The fundamentals
Return and risk are linked. A promised return far above what comparable investments pay, with little or no risk, is not an opportunity. It is a description of a scam, or at best of a product whose risks are hidden. In any market, the price of higher expected return is higher risk.
Verify the counterparty before the asset. Before asking what an investment does, ask who is holding your money, who regulates them, and whether you can confirm that independently, not through a link they provided.
Test liquidity early. A legitimate platform lets you withdraw. The test is not a small withdrawal that succeeds, which scammers also allow. It is whether you could withdraw the whole amount, on the terms you were told, at any time.
Set the rules when you are calm. A written policy that says "I do not invest through anyone who contacts me first" or "I do not transfer money to open an account" does the thinking in advance, when the pressure is not on.
Practical implications
- Never invest through a person or group that contacted you first, and treat an invitation to a private chat group as a warning.
- Check the licence on the regulator's own website, not on the firm's.
- Search for the advertisement's claims independently. A well-known person endorsing a scheme is very often not endorsing it.
- Move slowly with large transfers. A bank can often delay or reverse a payment if you tell it quickly. Ask your bank which controls it offers.
- Tell someone. A second pair of eyes breaks the isolation that scams rely on.
- Report a loss immediately. Time matters for any chance of recovery.
What we could not confirm
The figures come from a news report of ministry data for one quarter, and we did not retrieve the original release. We did not research later quarters, so we make no claim about trends. The behavioral patterns are general and not specific to any one scheme. This is education, not investment or legal advice.
Sources
- Taipei Times, Fraud losses and investment scams (20 January 2025)