NAIROBI (Coinchapter.com) – As Japan’s stock market thrives, investment scams are also escalating. Criminals exploit the financial shift as inexperienced investors chase higher returns. On May 20, 2024, the Nikkei 225 index soared to 39,069.68. The National Police Agency reported a sevenfold increase in scam-related losses in Q1 2024 compared to the previous year, according to Bloomberg. There were 1,700 reported scams, with an average loss of 13 million yen per case.
Criminals exploit Japan’s new investment trend. Rising consumer prices and government encouragement for higher returns have driven financially inexperienced individuals to invest. Kazuhide Saijo, president of the Organisation of Investment Scam Victims, stated,
“For the scammers, it’s no risk, high return. Japan has only taught people to work hard and save money. In terms of investment, people are like babies.”
Why Investment Scams are Rising
Kazuhide Saijo, president of the Organisation of Investment Scam Victims, explained, “For scammers, it’s no risk, high return. Japan has only taught people to work hard and save money. In terms of investment, people are like babies.”
Japan, once relatively unscathed by such frauds, is now vulnerable due to rising inflation and government measures promoting investment in stocks. Inflation reached a four-decade high in 2023, and the government expanded tax-exempt accounts to encourage investing.
Ms. Endo, in her early 60s, felt her savings were inadequate for retirement. A Facebook ad for investment seminars caught her eye. She joined a group and began investing through an app they recommended. Gradually, she invested 20 million yen, lured by promises of high returns. But when she tried to withdraw her balance in December, she discovered the app was a fake.
Government and Tech Giants Take Action
The surge in investment scams in Japan has prompted government action. Prime Minister Fumio Kishida announced measures to counter these scams will be unveiled in June, focusing on arresting criminals. Lawmakers press Meta to act against fraudulent ads, with some urging a suspension of Facebook ads in Japan.
Meta has stated its commitment to combating fraudulent advertising, having invested over US$20 billion in platform security since 2016. A representative acknowledged the ongoing cases but declined to comment specifically.
Despite a 29.2% rise in stock investments by Japanese households in December 2023, cash savings still dominate, making Japan a target for scammers. Professor Mayuko Suzuki of Osaka Kyoiku University noted the lack of financial education, emphasizing the need for better awareness.
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