"Buy Gift Cards and Receive Additional Gift Cards"
Initially Offered but Later Unpaid,
Victims Estimated in the Hundreds Nationwide
A woman who raised billions of won by selling gift certificates in a mom cafe has been sued on fraud charges.
According to the Gunpo Police Station in Gyeonggi Province, three members of a Naver cafe recently filed a fraud complaint against the cafe operator, Ms. A, Yonhap News reported on the 14th.
Ms. A is accused of promising cafe members that if they purchased gift certificates worth a certain amount, she would provide additional gift certificates equivalent to 15-35% of the principal, but took the money without delivering the gift certificates.
After opening a mom cafe on a portal site in 2018, Ms. A sold baby products and home appliances at low prices, gaining word-of-mouth popularity among mothers, and the number of cafe members gradually increased. As the cafe grew, Ms. A began selling department store, cultural, and gas station gift certificates from 2019. The membership eventually reached about 15,000.
Ms. A divided members into tiers and proposed so-called 'gift certificate investment.' This investment involved buying gift certificates of a certain amount and receiving bonus gift certificates. Additional gift certificates of 15-35% were given depending on the tier. Ms. A also offered luxury scarves, card wallets, and gold bars based on the purchase amount to encourage members to buy more.
One victim member said in an interview with SBS, "If you put in 1 million won in cash, you receive 1.3 million won worth of gift certificates. I received them about five times at first."
Members who initially earned profits with small amounts began investing larger sums. Some even took out bank loans or withdrew their house deposits, depositing over 200 million won to Ms. A. However, from the second half of 2021, the delivery of gift certificates noticeably delayed.
When pressured, Ms. A diverted by saying she was involved in various investment projects but ultimately did not pay. Victims filed complaints with the prosecution and police. They claim that although Ms. A says she has no money to return, she lives a luxurious life driving expensive cars and buying luxury goods.
Estimated hundreds nationwide... Why does the same type of mom cafe gift certificate fraud keep recurring?
Mom cafe scams involve methods such as so-called 'group purchases,' where cash is deposited into an account after promising discounted purchases through bulk orders, including gift certificates, but the goods or gift certificates are not delivered. [Image source=Pixabay]
The number of Ms. A’s victims is estimated to be in the hundreds nationwide. More than 20 members have confirmed filing complaints against Ms. A, and 23 more are preparing to sue. Investigations are underway in at least five locations, including the Incheon District Prosecutor’s Office, Suwon District Prosecutor’s Office, and police stations in Incheon Yeonsu, Gunpo in Gyeonggi, and Jinju in Gyeongnam.
A police official stated, "A complaint from another victim was previously received, and after investigation, the case was sent to the prosecution. Additional complaints have since been filed, and the investigation is ongoing."
Ms. A’s side, through a lawyer, said, "It is true that some debt relationships have not been neatly resolved, but it is questionable whether this constitutes fraud. We are still trying to make repayments."
Meanwhile, gift certificate investment fraud related to mom cafes is not new. As of the first half of 2020, there were dozens of mom cafe gift certificate fraud cases, and victim reports have continued since then.
Mom cafe frauds similar to Ms. A’s method involve receiving cash deposits into accounts through so-called 'group purchases,' which offer discounts on bulk orders including gift certificates, but then failing to deliver the goods or gift certificates.
Experts advise, "In cases of mom cafe fraud, there are various sales formats online such as mom cafe group purchases and direct imports, but above all, any sales that are even slightly cheaper or unusual should be suspected and never trusted."
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