"Minimum OO% Return Guaranteed"... Financial Supervisory Service Issues Consumer Alert on 'Stock Leading Rooms'

[Asia Economy Reporter Eunmo Koo] The Financial Supervisory Service (FSS) issued a consumer alert (caution) on the 22nd, stating that investor damages are occurring in 'stock leading rooms.'

Stock leading rooms operate in group chat rooms on platforms such as KakaoTalk and Telegram, where so-called 'stock investment experts' (leaders) recommend in real-time the buying and selling of specific stocks (stock leading).

The FSS stated that many stock leading rooms operated by quasi-investment advisors or ordinary individuals lure users into paying usage fees typically amounting to several million won by presenting baseless performance claims such as profitability and stock hit rates. An FSS official said, "Usage fees of 2 to 3 million won per month are common, and in some cases, fees exceed 10 million won."

The FSS explained that stock leading room operators are not authorized financial companies, so their financial expertise and investor protection measures have not been verified in advance. Investors misled by false or exaggerated advertisements such as 'guaranteed minimum OO% returns' or 'OO% stock hit rate' are likely to suffer damages such as investment losses and refusal of fee refunds after paying high costs to join as paid members of stock leading rooms.

It is also difficult to claim damages in case of losses. There was an actual case where a member joined after seeing an advertisement claiming 'minimum 50 to 200% returns,' but the operator induced the member to join a VIP management room by paying an additional amount, claiming that profits could only be made there, and then disappeared.

There have also been cases of refusal to refund usage fees or excessive penalty charges. An FSS official said, "After signing a one-year contract, when a user requested early termination after three months, the operator refused a refund, claiming that only one month was a paid period and the remaining 11 months were free," adding, "There are also cases where additional amounts are deducted under the name of textbook fees or other charges when processing contract cancellations before refunding."

The FSS also emphasized that investors who trade stocks following the recommendations of leading room operators may become involved in criminal cases such as stock price manipulation.

An FSS official said, "There are cases where stock leading room operators purchase stocks in advance before recommending them to members and then encourage members to buy, or spread false information to raise stock prices and profit."

The FSS plans to strengthen the review of business plans when receiving quasi-investment advisory business registration applications to eradicate unsound business practices by quasi-investment advisors. It will also focus on investor protection through warning letters, broadcasts, and undercover inspections targeting quasi-investment advisors related to stock leading rooms.

This content was produced with the assistance of AI translation services.