PREVENTION AND CONTROL OF FRAUD IN REAL ESTATE TRADING PLATFORM SERVICES: LESSONS FROM SOUTH KOREA AND IMPLICATIONS FOR VIETNAM

Abstract: Fraud in real estate trading platform services constitutes a persistent and multifaceted challenge across jurisdictions, including Vietnam. Manifestations are evident in the proliferation of fictitious exchanges, fraudulent deposit agreements, lack of transparency in market information, and insufficient inter-agency coordination. This study examines the legal frameworks and regulatory techniques employed in South Korea to address fraud in exchange-based real estate transactions. Through case analysis, it elucidates the Korean model, which relies on a mandatory registration regime for exchanges, the digitalization of transaction data, and transparent enforcement mechanisms to deter and sanction misconduct. Drawing upon these insights, the article offers several implications for Vietnam: strengthening statutory provisions on licensing requirements and the legal liabilities of exchanges, establishing a transparent national real estate database, and leveraging information technology in supervisory mechanisms. These proposals aim to reinforce legal enforcement capacity and enhance consumer protection within the real.

Keywords: Fraud; Real estate transactions; South Korea; Vietnam; Law; Electronic transactions; State management

I. INTRODUCTION

Over the past two decades, Vietnam’s real estate market has witnessed rapid growth in terms of scale, transaction value, and the level of participation by relevant actors. The development of this market has played an important role in economic growth, attracting investment, and regulating urban development. In that context, real estate trading platforms have emerged as intermediary entities with the function of connecting sellers and buyers, lessors and lessees; providing information; assisting with legal procedures; and contributing to the promotion of transparency in transactions. However, practice in Vietnam in recent years shows that fraudulent conduct in the operations of real estate trading platforms has become increasingly complex and sophisticated. Numerous cases are associated with so-called “ghost” platforms - i.e., platforms operating openly without lawful registration; incidents in which platform's employees defraud customers of deposits; or the provision of false information regarding legal status, planning, or project progress in order to mislead clients. These practices have caused serious losses to consumers and investors. Many cases have been prolonged and difficult to resolve due to the absence of clear legal provisions on establishment conditions, the legal liability of exchanges, as well as proportionate monitoring and sanctioning mechanisms.

The foregoing shortcomings reflect a significant legal gap in the design of the regulatory framework for real estate trading platforms in Vietnam at present. Meanwhile, a number of Asian countries with comparable institutional characteristics - most notably the Republic of Korea - have developed a relatively comprehensive system for fraud control, combining stringent legal provisions, transparent licensing mechanisms, and the application of digital technologies in transaction monitoring. The choice of Korea as a reference model in this study derives from two principal reasons. First, Korea has established a fairly complete legal framework governing brokerage services and real estate trading platforms, with particular emphasis on consumer protection and information transparency. Second, the country has successfully implemented digital tools such as a national real estate management platform, which enables the tracking, verification, and archiving of transaction information on a nationwide scale. This study therefore seeks to: (i) analyze anti-fraud mechanisms in the operations of real estate trading platforms in Korea; (ii) compare them with the current situation and legal gaps in Vietnam; and (iii) propose a number of feasible policy recommendations that may contribute to the improvement of the legal system and the enhancement of regulatory effectiveness in this sector. The scope of the research is confined to fraudulent practices originating from real estate trading platforms themselves, without delving into other forms of fraud in real estate transactions more broadly.

II. THEORETICAL FOUNDATION FOR PREVENTION AND CONTROL OF FRAUD IN REAL ESTATE TRANSACTIONS THROUGH TRADING PLATFORMS

1. The definition of fraud in real estate transactions through trading platforms

According to legal theory, “fraud” is understood as the intentional act of providing false information or concealing material facts with the purpose of deceiving the counterparty, thereby inducing them to enter into a transaction that is inconsistent with their actual interests. In civil transactions, fraudulent conduct may result in consequences such as the invalidation of the contract, claims for damages, or even criminal prosecution. In the field of real estate - a sector associated with high-value assets, complex legal attributes, and a heavy reliance on information - fraud is commonly perpetrated through the deliberate misrepresentation of ownership, land-use rights, legal status, planning schemes, asset valuation, or the identities of the parties to the transaction. According to the study by Lim & Han (2021) in South Korea, real estate fraud through trading platforms often involves: “Deliberately inflating asset values, falsifying legal documents, concealing planning status, and colluding with brokers to defraud buyers.”[1] Under positive law, Vietnamese legislation does not provide a unified definition of “fraud in real estate transactions.” However, relevant provisions indirectly regulate this conduct through concepts such as “fraudulent appropriation of property” (Criminal Code), “contract concluded under deception” (Civil Code), or “act of providing misleading information causing damage to consumers” (Law on Protection of Consumers’ Rights). In certain jurisdictions, such as South Korea, the United States, and Singapore, fraud in the field of brokerage and real estate exchanges is defined in a more specific manner, with prohibited acts clearly enumerated, accompanied by mechanisms for the disclosure of transaction information and accountability of intermediary entities. Based on these approaches, the author proposes that the concept of fraud in real estate exchange transactions should be understood as follows: an act of intentionally providing false information, concealing the truth, falsifying documents, colluding or exploiting the operational process of a real estate exchange in order to gain illicit profit or cause damage to another party to the transaction, thereby undermining transparency and fairness in the real estate market.

2. Fundamental theories

To gain a clearer understanding of the nature of the issue and to establish the starting point for the research, we first examine the following fundamental theories:

2.1. Information Asymmetry Theory

According to George Akerlof in his work “The Market for Lemons” (1970), when sellers possess more information than buyers, fraudulent practices are likely to arise in the absence of regulatory safeguards. George Akerlof (1970) laid the foundation for this theory through his renowned article “The Market for Lemons”. He demonstrated that in a market where sellers are fully aware of the quality of goods (used cars), while buyers are not, low-quality goods will dominate the market - ultimately leading to “market failure”[2]. In the real estate sector - where information is often opaque and difficult to access - this risk is even more pronounced. Real estate exchanges, if failing to ensure transparency of information, may become platforms that facilitate the proliferation of fraud. Information asymmetry is the principal cause leading to fraud, price inflation, and unfair trading practices. This is the reason why many countries have established mechanisms such as transaction reporting, digital asset registration, and licensing of real estate exchanges.

2.2. Principal-Agent Theory

Principal–Agent Theory examines the relationship between two parties. The principal is the delegating party, who owns resources, interests, or decision-making authority (for example, shareholders or clients). The agent is the delegated party, who performs tasks or makes decisions on behalf of the principal (for example, a CEO or a real estate broker). Problems arise when the agent does not fully act in the best interests of the principal, due to the fact that, as a result of information asymmetry, the agent often possesses more knowledge about his or her own behavior or about the actual situation, and because their interests may diverge. Consequently, the agent may prioritize personal benefits (such as income, power, or reputation) over the interests of the principal[3]. According to this theory, brokers/real estate exchanges may act in their own interests rather than in the interests of their clients. In the absence of effective supervisory mechanisms and sanctions, fraudulent behavior is likely to occur due to the misalignment of interests. This explains why professional ethical standards, legal liability, and strict control procedures are necessary.

2.3. Fraud Triangle Theory - Donald Cressey

Donald R. Cressey (1919–1987) was a criminology professor at Indiana University and later served as an advisor to numerous anti-fraud organizations. In his classic study on “trust violators” - individuals who were trusted within organizations but committed fraud - Cressey developed a model explaining why people engage in fraudulent behavior. This model serves as the foundation for risk management systems, internal auditing, and the development of anti-fraud regulations, helping organizations not only to focus on “after-the-fact remedies” but also to prevent fraud at its root by: reducing unhealthy financial pressures (through reasonable performance management), strengthening control and transparent supervision, and promoting ethical values, legal compliance, and strict sanctions. The three components of fraud, according to this model, are: pressure, opportunity, and rationalization[4]). In the field of real estate exchanges, profit or sales pressure generates the motivation for fraud; gaps in supervision and inspection create opportunities; and an environment lacking professional standards leads to rationalization. Preventing fraud requires addressing all three of these factors through legal frameworks, digital monitoring, and professional ethics. Real estate transactions are particularly susceptible to fraud due to high asset values, complex ownership structures, and limited oversight in many countries. Common forms of fraud include title fraud, misrepresentation of asset value or condition, and the use of third-party intermediaries to conceal the true owner[5].

3. Characteristics of fraud in the real estate trading environment

Real estate transactions conducted through exchanges are essentially information-intermediated. Buyers and sellers often do not interact directly, but rely on data, referrals, and contracts prepared by the exchange. “Fraud in real estate transactions is often a collusive behavior involving multiple parties, making detection and enforcement particularly challenging”[6]. This makes information both a core element and a vulnerability susceptible to manipulation. According to Nadav Shoked, “fraud in urban real estate is not merely the result of a few dishonest individuals violating the law. On the contrary, it is embedded within the very legal structure and institutional framework regulating property rights”[7]. Some prominent characteristics of fraud in the real estate exchange environment include: (i) Intangibility of the act: fraud does not occur as a tangible coercive action, but typically involves concealment, distortion, or fabrication of information; (ii) Information asymmetry: buyers often lack the capacity to verify the accuracy of information provided by the exchange, making them susceptible to being misled. Fraud occurs when asymmetric and non-transparent information goes unchecked[8]. Common forms of fraud include impersonating property owners or project developers to execute fictitious contracts; establishing “phantom exchanges” without business registration or a legitimate address; defrauding deposit or reservation funds through ambiguous contracts; and price inflation or market manipulation using falsified information about “land fever” or nonexistent zoning. Fraud in this context represents a form of legal opportunism, exploiting legal loopholes and the trust placed in the exchange system[9]. Real estate transactions conducted through exchanges are expected to serve as a tool to enhance market transparency, mitigate risks, and protect the participating parties. However, even within this environment, numerous complex forms of fraud persist, each with distinctive characteristics, manifested in the following aspects:

First, Fraud is organized and collusive among multiple parties

Unlike isolated individual acts of fraud, fraud in the real estate exchange environment often involves systematic collusion among multiple parties, such as: developers – exchanges – brokers; exchanges – licensing authorities – appraisal organizations. Internal brokerage staff may also collude to manipulate transactions. For example, some exchanges establish “phantom projects” or impersonate representatives of developers to conduct transactions, causing significant losses for buyers. “Fraud in real estate transactions through brokerage typically involves organized schemes, where multiple parties collude to misrepresent asset conditions or ownership status, making detection and enforcement more difficult”[10].

Second, Information is concealed, sophisticated, and difficult to verify, fraud through exchanges often exploits the intermediary position of the exchange to conceal, obscure, or manipulate information. Common examples include unclear or outdated legal information (land use rights certificates, zoning, mortgages), prices inflated through multiple layers of internal transactions (brokers impersonating clients), and one-sided market information from the exchange lacking independent verification sources. Since buyers typically trust the exchange and lack independent verification tools, they are easily trapped by misleading information. According to Ronald Coase and Douglass North, markets operate efficiently only when intermediary rules exist to reduce transaction costs, control risks, and enforce contracts.[11] (Coase, 1937; North, 1990)

Third, Exploiting trust in the “legitimizing” role of the exchange

A particularly characteristic feature is the psychological trust that transactions conducted through exchanges are inherently safe, which facilitates the occurrence of fraudulent activities. Some exchanges exploit their legally valid business licenses to conceal deceptive operations. The processes of placing deposits, signing agreements, and making payments through the exchange often create a false sense of security among buyers, who assume by default that the exchange provides a “legal guarantor” function. When an exchange is perceived as an institution that “legitimizes” transactions, individuals tend to reduce independent verification, thereby creating opportunities for fraudulent acts to occur. This phenomenon represents a concrete manifestation of information asymmetry and conflicts of interest within the principal-agent model.

Fourth, Difficulty in proof and enforcement in legal practice

Due to the sophisticated nature of fraud, which often does not manifest clearly in contracts, it is extremely difficult to prove the element of “intentional deceit” in civil disputes. Criminal sanctions (e.g., fraud offenses) require clear evidence of both the act and its consequences, often leaving gaps in enforcement. Exchanges frequently shift blame to “third parties” or “independent brokers,” thereby evading responsibility. Current law does not provide specific regulations regarding the monitoring obligations of real estate exchanges with respect to the accuracy of information, making it difficult to establish legal liability when fraud occurs. “Real estate transactions are attractive to criminals because they can be used to conceal the origin of illicit funds and legitimize them within the formal economy. In many countries, oversight of real estate agents and transactions remains limited, rendering the sector vulnerable to abuse”[12].

Fifth, Repeatability and amplification through digital technology

Nowadays, many exchanges use online platforms to reach large numbers of consumers, thereby: disseminating false information at high speed (via websites, apps, and social media); creating “fake transactions” or posting fake reviews to boost credibility; and employing technologies such as deepfakes and forged electronic documents in the verification of parties or assets.

From the characteristics outlined above, it is evident that fraud in the real estate exchange environment constitutes organized behavior, exploiting the intermediary role of the exchange and societal trust in the platform to carry out sophisticated and difficult-to-address schemes. This underscores the urgent need to complete the legal framework and establish stricter control mechanisms for both exchanges and practitioners.

III. CURRENT SITUATION IN VIETNAM REGARDING THE PREVENTION OF FRAUD IN REAL ESTATE EXCHANGE SERVICES

1. Typical methods of fraud in real estate exchange services

Recent practice in Vietnam has shown a concerning increase in fraudulent activities within real estate trading services, with methods becoming increasingly sophisticated, organized, and exploiting the lack of transparency in information as well as gaps in control mechanisms. Common fraudulent practices include:

Firstly, misleading information regarding legal status, planning, and asset value. Some real estate exchanges and brokers have deliberately provided inaccurate or unverified information, causing buyers to misunderstand the legal status of the property, land use rights, or future development plans. “Regarding the two projects, The Spring Town and Legacy Hill Hòa Bình, located in Lương Sơn District: To date, there has been no notice from the Hoa Binh Provincial Department of Construction confirming that these projects meet the conditions for sale or capital mobilization”.[13]

Secondly, creating fictitious transactions to manipulate prices and generate artificial liquidity. Many real estate exchanges establish dummy deposit agreements or framework contracts among related parties to create the illusion of high transaction volumes, thereby “inflating prices” and misleading the market. Mr. Nguyễn Mạnh Hùng, Standing Member of the Economic Committee, noted that recent transactions conducted via real estate exchanges remain unregulated, with numerous instances of “collusion” between developers and exchanges to raise property prices, artificially overheating the market”.[14]

Thirdly, exploiting the “licensed exchange” status to create false trust. Numerous cases involve individuals or organizations claiming to be a “licensed real estate exchange”, posting images of lavish offices to reassure clients, while in reality they are not registered as an exchange under the provisions of the Law on Real Estate Business. At the end of August 2023, authorities caught Lộc Phúc Company operating a fictitious real estate exchange on a vacant lot in An Viễn Commune, Trảng Bom District (Đồng Nai) to fraudulently appropriate clients’ assets. At the scene, police detained 186 related individuals, including 143 persons comprising the company’s CEO, employees, and actors hired to impersonate clients, along with 43 victims”.[15]

Fourthly, misappropriation of deposits through the sale of property without ownership rights or under mortgage. Numerous cases indicate that buyers were induced to sign deposit agreements with parties who were not the lawful owners or for properties that were under seizure or pledged as collateral.

The methods employed by these enterprises are largely similar. After placing a deposit for the transfer of a land plot (without completing full payment or without having received the transfer) or after having received the transfer but not yet completed the project’s legal framework in accordance with the law, the parties erect fences around the land, build unauthorized roads, construct entrance gates, display advertising boards, draw project subdivisions themselves, and post sales information online. Subsequently, they hire distribution companies to cooperate in selling the project units, assign sales staff to distribute leaflets, and promote the project, all with the aim of gaining the trust of potential buyers.[16]

Fifth, collusion between developers and brokerage platforms to “double-sell” properties or withhold premium units to sell at a higher price. These practices violate obligations of honesty and transparency, creating inequality between consumers and vested interests. All of these behaviors reflect a common characteristic: severe information asymmetry, lack of independent oversight mechanisms, and ambiguity regarding the legal responsibilities of the real estate exchange platforms.

2. Legal framework governing fraudulent conduct in real estate exchange services

2.1. Law on Real Estate Business 2023

The Law on Real Estate Business 2023 has introduced certain improvements in regulating the operations of real estate exchanges, particularly:

Article 66(1) of the Law on Real Estate Business stipulates that organizations and individuals engaged in real estate trading platform services must establish a business entity and register the platform’s operations with the Department of Construction. Article 68 requires platforms to publicly disclose information on the real estate being transacted, including legal dossiers, land use right certificates, encumbrances, disputes, etc. However, the Law does not provide specific regulations on the responsibility to verify information, nor does it impose an obligation to compensate for misleading information, except in cases resulting in criminal liability.

2.2. Civil Code 2015

Theoretically, Articles 122, 123, and 124 of the Civil Code 2015 stipulate that civil transactions are void if they violate prohibitions, are fictitious, fraudulent, or aim to conceal other transactions. However, in practice, proving the element of “intentional deceit” is extremely difficult, especially in cases of deposit contracts or memorandum-of-understanding agreements.

2.3. Criminal Code 2015 (amended 2017)

Certain acts may be subject to prosecution under Article 174 (Fraudulent Appropriation of Assets) and Article 198 (Using a Computer Network to Misappropriate Property); however, the application of these criminal provisions remains limited due to the requirement to prove intentional wrongdoing and specific damage, resulting in most cases being treated merely as “civil disputes”.

3. Fundamental shortcomings of Vietnamese law on real estate trading platform services:

So far, Vietnam does not have a clear legal definition of “fraud in real estate trading platforms.” There is no separate concept or provision in the Law on Real Estate Business, making it difficult to determine administrative or civil sanctions. The law does not stipulate the verification responsibility of the platform, only requiring disclosure of information; without an obligation to authenticate, the platform may remain “innocent” if disputes arise. There is no reporting mechanism or unified electronic transaction database, which makes it difficult to trace transactions and detect fraud. The following are some key shortcomings that real estate trading platforms in Vietnam have yet to address:

First, the level of information transparency is still limited. Vietnam does not have a mandatory legal mechanism requiring platforms to fully disclose information about brokers, the legal status of real estate, transaction history, or actual selling prices. Current regulations are mainly advisory in nature and lack measures to verify or authenticate information.

Second, the ability of state authorities to monitor transactions remains weak. Regulatory agencies are not equipped with digital platforms or real-time data systems to supervise trading activities on platforms. Most transactions currently occur through “manual” methods or are organized independently by third parties, making it difficult to track and handle suspected fraud.

Third, legal liability and enforcement measures for platform operators are insufficient. The new law provides for the revocation of business eligibility certificates for violating platforms, but it does not clearly stipulate monitoring obligations, compensation responsibilities, or criminalization of organized fraudulent activities. In practice, many illegal platforms continue to exist under disguised branches, making them difficult to address comprehensively.

Fourth, regarding technological infrastructure: From manual methods to fragmented digitalization, Vietnam is still in the early stages of digital transformation in the real estate sector, with significant shortcomings. Unlike South Korea’s Real Transaction Management System, there is currently no unified system to manage real estate transactions from listing information, verifying legal status, to contract signing and transfer. Some localities are piloting digital trading platforms, but their scale is small and participation is not mandatory. Although electronic real estate contracts are recognized under civil and commercial law, there is a lack of specific legal mechanisms in the real estate sector. There is no legal requirement to use electronic platforms in transactions, leading to widespread use of paper contracts that are easily forged or altered.

Fifth, lack of inter-agency data integration: Land, housing, planning, tax, and ownership data are managed by multiple ministries and agencies, with insufficient integration and information sharing. Access to information depends heavily on local officials, with no transparent online tools, creating conditions for asymmetric information.

The above limitations are not only technical but also institutional, cognitive, and resource-related: Lack of resources to develop modern digital systems: Establishing a management system similar to South Korea’s RTMS requires significant investment, a skilled technical workforce, and inter-agency collaboration—resources that Vietnam currently lacks. Fragmented databases: In practice, government agencies still operate on local, manual databases, lacking connected application programming interfaces( API ) which makes it difficult to establish a nationwide fraud control system. In addition, the accuracy and timeliness of local data are low, reducing the effectiveness of fraud prevention. Weak legal awareness among citizens and investors: Most participants in the real estate market are not accustomed to verifying legal status through official channels and are easily misled by false advertising on social media. The mentality of “fast transactions,” shortcuts, and limited legal knowledge causes many people to become victims of “ghost” platforms and “fake” contracts. Given these challenges, there is a pressing need to reference advanced international real estate trading platform models, particularly regarding legal mechanisms for fraud prevention in platform-based real estate transactions, in order to minimize risks for investors and consumers. Vietnam’s current legal framework lacks a comprehensive institutional design for preventing platform-related fraud. Assigning excessive responsibility to consumers, while failing to clarify the legal obligations of platforms—which are the intermediaries possessing information and the ability to control—represents a serious imbalance. In this context, South Korea’s model, which relies on digital platforms, traceable data, and clear platform accountability, provides valuable lessons and insights for Vietnam.

IV. THE LEGAL FOUNDATION OF SOUTH KOREA IN PREVENTING FRAUD IN REAL ESTATE TRANSACTIONS ON TRADING PLATFORMS

South Korea is a country with a vibrant real estate market but has also experienced periods of “land fever” and market crises. Since the 2000s, the South Korean government has pursued a policy of tightly controlling real estate transactions via trading platforms to ensure transparency of information and prevent speculation and fraud. The real estate trading platforms in South Korea operate under an “authorization–disclosure–control” model with close supervision by the State. This model is built upon a multi-layered legal system, including framework laws, sector-specific laws, and accompanying administrative regulations, integrated with a legal-technology system developed by the State.

1. Legal foundation

1.1. Act on Real Estate Brokerage Business

This is the central law regulating all real estate brokerage and real estate trading platform activities, including: Articles 3, 9, 26: Mandatory requirements for broker registration, conditions for licensing, and control of real estate trading platform operations. Articles 30–33: Provisions on administrative sanctions, license revocation, and suspension of professional practice for acts of fraud, forgery, or provision of false information. Article 25: Mandatory use of standard contracts, record-keeping of transaction documents, and provision of information to regulatory authorities upon request. Legal value: This is the foundational law, establishing the legal responsibilities of brokers, the licensing mechanism, obligations to ensure transparency of information, and the framework for handling administrative violations.

1.2. Law on Public Real Estate Transactions

This Law regulates the responsibilities for reporting and verifying real estate transactions, including:

Articles 3–5: All real estate purchase, sale, and transfer transactions must be reported and verified through the electronic transaction system within 30 days. Articles 10–12: Establish a national database on actual transaction prices (Real Transaction Price Disclosure System). Articles 13–15: Hold parties accountable for false declarations, undisclosed transactions, or tax evasion. This serves as the foundation for the nationwide electronic real estate trading system (K-RETS) and the development of transparent transaction price data.

1.3. Law on Land Use Planning and Management

This law does not directly regulate fraud but serves to support transparency in planning information and prevent fraud arising from false information: Articles 117–119: Obligation to provide land use planning data to the public. It forms the basis for the LURIS (Land Use Regulation Information System) – a system integrating all planning, land-use purposes, and construction restrictions for each land parcel. Legal value: It enables citizens and real estate trading platforms to verify planning and land-use purposes, preventing deception by fictitious project information.

1.4. Law on Electronic Government

This is the legal foundation for digital transformation in the real estate sector, including: Articles 8–10: Establishing an integrated public data system and disclosing administrative information. Articles 24–27: Providing digital administrative services, including electronic licensing, electronic contracts, storage, and verification. Legal value: Legalizes the use of technology platforms, serving as a legal tool in management and fraud prevention.

1.5. Subordinate legal documents and administrative guidelines

The ministries, particularly the Ministry of Land, Infrastructure and Transport (MOLIT), have issued a series of regulations governing brokerage activities, contracts, trading platforms, and violation handling, for example: Circular on the Electronic Real Estate Trading System (RETS Operation Regulation).

Regulation on the operation of public data on actual real estate prices; Broker’s Ethical Code. These serve as flexible instruments to effectively implement the framework law, ensuring adaptability to market and technological developments.

The real estate trading platform model in South Korea is built upon a multi-tiered legal system - from framework laws to specialized laws and technical administrative regulations - closely integrating legal norms with digital infrastructure, creating a transparent, accountable, verifiable, and enforceable legal environment. This approach prevents fraud not only through sanctions but, more importantly, by preemptively addressing fraudulent behavior through institutional design. According to Park, J. H., “Codifying obligations and responsibilities is essential to ensure accountability in digital transactions”.[17]

2. South Korea’s legislative approach to controlling real estate fraud

South Korea has developed its real estate legal framework based on the principle of “transparency – supervision – traceability – deterrence,” with three core objectives: preventing fraud at its source through a transparent data system, identifying and controlling all market participants, and strengthening criminal and administrative sanctions against violations. The South Korean real estate trading platform management model emphasizes digitized rule of law, combining legislation and technology, with “transparency and traceability” at the center of legal design. South Korea approaches fraud control in real estate by promoting market transparency through a mandatory transaction reporting system regulated under the Real Estate Actual Transaction Price Reporting Act, amended in 2020. This system requires buyers, sellers, and brokers to report all transaction details truthfully and on time - including price, timing, and asset status - to the competent authority. The information is then integrated into the national transaction registration system. The legislative mindset here reflects a shift from post-hoc inspection to proactive prevention through digitized data.

3. Institutions supporting law enforcement

South Korea not only establishes laws but also organizes an effective enforcement apparatus: The National Real Estate Transaction Oversight Agency: Collects, analyzes, and issues alerts on unusual transactions. The Korea Land & Housing Information Portal System: Publicly discloses prices, ownership, zoning, and building permits for each property in real time. The Real Estate Brokerage Inspection Team: Conducts regular and ad hoc inspections of trading platforms and brokerage activities.

4. Positive impacts on the market

Strict legal policies have enabled South Korea to curb price manipulation, land speculation, and illegal projects, increase consumer confidence in the real estate trading environment, and significantly reduce civil disputes related to misinformation in transactions. According to statistics from the Ministry of Land, Infrastructure and Transport of South Korea, the number of fraudulent activities in real estate trading via platforms decreased by 42% from 2018 to 2022 following the implementation of the real transaction price reporting system and electronic platform management.

5. Fundamental principles for fraud prevention in South Korea

5.1. Principle of information transparency

Planning information, transaction prices, participating parties, brokerage history, standard contracts, and so on are all mandatorily disclosed on government digital platforms. Participants in transactions have both the right and the obligation to check, verify, and trace legal information before executing any transaction. Preventing fraud at its root targets false or misleading information, which is the most common form of fraud.

5.2. Principle of traceability and accountability

All transactions must be reported through the electronic system (RETS) and are simultaneously stored, identified, and verified from the broker to the buyer and seller. In case of detected fraud, the system can trace individual responsibility (broker, trading platform, developer) through the electronic transaction history. Thus, there is no room for “anonymity” or “vague collective responsibility”—factors that often create loopholes for fraud in countries without digitized systems.

5.3. Principle of risk prevention first – violation handling later

The legal and technological systems are designed to make fraud difficult to occur, rather than merely punishing after the damage has taken place. Regulations on information verification, licensing conditions, broker credit assessment, and standardized electronic contracts are all intended to prevent violations from the outset. This reflects the principle of preventive governance, a higher level compared to mere administrative management.

5.4. Principle of clearly delineated legal liability

Brokers and real estate trading platforms not only have the right to provide services but also bear independent and specific legal liability in case of violations. The law requires brokers to compensate clients for damages if they breach their obligations to provide information, uphold professional ethics, or evade transaction reporting. Significance: It ends the situation of “legal irresponsibility” of certain platforms while simultaneously enhancing professionalism in the brokerage sector.

5.5. Multi-tiered coordination principle

The operational mechanism of this model involves coordination among: the central government (Ministry of Land, MOLIT): system design, licensing, nationwide supervision; local authorities: periodic inspections, enforcement, inspection coordination; technology enterprises, trading platforms, and citizens: using the platform, reporting, and alerting fraudulent activities. From this, a multi-centered anti-fraud ecosystem is established, not unilaterally dependent on the administrative apparatus.

5.6. Principle of integrating law and technology

South Korea is a pioneering country in “legalizing” technological infrastructure: digital platforms such as RETS, K-APT, and LURIS are all legally recognized with the same validity as paper-based procedures. Electronic contracts, digital storage, practitioner identification codes, and planning verification are all legally recognized and mandatory. This creates a foundation of “digital legality,” where technology serves as an effective means of enforcing the law rather than merely an administrative tool.

The operational principles of the South Korean model are not only management techniques but reflect a modern legal vision: prevention as the core, transparency as the instrument, accountability as the motivation, and technology as the tool. This is a system of rules demonstrating an advanced level of governance under the rule of law in the real estate market - a sector inherently prone to risks, fraud, and information asymmetry.

6. Anti-Fraud technological infrastructure

South Korea is one of the few countries to fully integrate the entire real estate transaction process into a digital environment with three main technological platforms:

RTMS – Real Estate Transaction Management System: This is a national real estate transaction management system that connects data from all registration offices, trading platforms, tax authorities, and banks. RTMS helps control the flow of information related to parties, property types, transaction values, and procedures, while simultaneously detecting anomalies in real time.

Electronic Contract System: Since 2016, the South Korean government has mandated that real estate transactions use digitally authenticated electronic contracts. This platform stores contracts within the government’s data system, ensuring integrity, authenticity, and traceability.

Real Estate Information Disclosure System: Citizens can access legal status, planning, and actual transaction prices of individual properties through the national information portal. This helps limit the actions of “price inflation”, “false planning” or concealing negative information. Additionally, many trading platforms now integrate technologies such as two-factor authentication (2FA), electronic Know Your Customer (e-KYC), and pilot blockchain applications for contract storage and identity verification to prevent forgery.

7. Control and violation-handling mechanisms

Unlike Vietnam, South Korea implements a strict supervision mechanism: Mandatory registration and professional license issuance: All real estate trading platforms and individual brokers must register their activities with local authorities and are issued a unique professional license number linked to the national database. Unauthorized or impersonating brokerage activities are subject to severe penalties. Supervision through the government database: Authorities regularly cross-check information between platforms, electronic contract systems, and tax data to detect discrepancies. The RTMS system automatically alerts for abnormalities in prices, transaction frequency, or duplicate ownership information. Strong sanctions and high enforcement: Fraudulent acts, including false information, deposit scams, and unlicensed brokerage, can be subjected to high-level administrative penalties, criminal prosecution, or permanent revocation of licenses. The government also requires practitioners to have professional liability insurance, creating a mechanism for swift compensation to victims.

The South Korean model is a prime example of digital governance in preventing real estate trading platform fraud. The combination of strict legislation, modern technology, and public-private oversight generates positive effects and offers valuable lessons for Vietnam in developing a transparent real estate trading ecosystem. The integration of a clear legal framework, advanced technological infrastructure, and stringent sanctions has enabled South Korea to effectively control fraud in real estate transactions, specifically: Significant reduction in fraud cases: According to statistics from the Ministry of Land, Infrastructure and Transport, the number of brokerage-related fraud cases has decreased by over 60% since the implementation of the electronic contract system. Increased public trust: A 2022 survey showed that over 75% of citizens trust the transparency of the market, thanks to the ability to verify information online and trace transaction origins. Near-elimination of “ghost” trading platforms: Since 2019, 100% of platforms are required to publicly disclose operational information on the national data portal, updated automatically via the RTMS system.

V. IMPLICATIONS FOR VIETNAM

1. Improving the legal framework

First, amend and supplement the Law on Real Estate Business 2023 and its guiding documents in the following directions: Add obligations for information transparency: require real estate trading platforms and brokers to disclose the legal status of properties, planning status, transaction parties, and average regional prices. Make the use of electronic contracts mandatory for transactions involving brokerage or platform mediation, accompanied by a digital authentication mechanism. Establish a mandatory registration system for real estate trading platforms, with unique identification codes managed on a unified digital platform.

Second, issue a legal framework for electronic real estate transactions: serve as a legal basis for intangible transactions, electronic contracts, identity verification, and digital storage. Regulate the rights and obligations of parties and their legal responsibilities in the digital space.

Third, stipulate that real estate trading platforms are independent legal entities with full legal capacity to operate and bear legal responsibility. Establish a “mandatory platform-mediated transaction” mechanism. (Amend Article 7(7) of the Law on Real Estate Business 2023: “The State encourages organizations and individuals to conduct buying, selling, transferring, leasing, lease-purchase, and subleasing of houses, construction works, and land-use rights through real estate trading platforms”), clarifying the legal status of platforms to ensure they are not merely listing sites but intermediary entities with clear legal responsibility, making platform-mediated transactions a tool to enhance market transparency.

Fourth, establish a strict and public sanctioning mechanism: Impose high administrative fines, revoke licenses permanently for organized fraud. Publicly disclose violating platforms on the national information portal to create a market deterrent effect.

2. Developing technical and digital infrastructure

Establish a National Real Estate Transaction Management System (VN-RTMS): A centralized platform to store, verify, and authenticate all information on real estate, trading platforms, and transaction history. Apply digital technologies to the transaction process: Implement electronic identification (eKYC), smart contracts, and blockchain-based storage to enhance authenticity, immutability, and traceability. Integrate and interconnect with other databases: Link the transaction management system with land records, civil registration, tax, and planning databases to ensure synchronized information for legal verification of properties before transactions. The real estate trading platform should serve not only as a marketplace but also as a governance tool integrating administrative, financial, and legal oversight in the urban land market.[19]

3. Strengthen enforcement and supervision mechanisms

Establish an effective inter-agency coordination mechanism: Enhance cooperation among the Ministry of Construction, Ministry of Justice, Ministry of Public Security, and Ministry of Science and Technology to monitor trading platform activities, handle fraud, and investigate violations. Set up a national real estate information portal: This portal will allow the public to check the legal status of properties, planning information, platform codes, brokers’ professional licenses, and actual transaction values in the area. Additionally, promote regular inspections and a citizen reporting mechanism: Create a simple channel for citizens to report violations by platforms or brokers, while also organizing random and surprise post-audit checks to detect fraudulent activities.

VI. WHY VIETNAM SHOULD STUDY AND APPLY THIS MODEL

First, Vietnam is currently facing increasingly complex and difficult-to-control real estate transaction fraud. In the context of a booming market, phenomena such as “price inflation,” “pre-selling,” “ghost projects,” unlicensed brokers, and “phantom transactions” are becoming more frequent. Although existing laws - including the Law on Real Estate Business, the Land Law, and the Housing Law - exist, they still lack mechanisms to effectively monitor the behavior of intermediary actors (real estate trading platforms/brokers). Regulatory agencies lack electronic inspection tools, integrated data, and early warning systems. The South Korean model shows that effective fraud prevention requires a combination of technology, institutional design, and proactive monitoring mechanisms, which are still largely absent in Vietnam.

Second, Vietnam shares economic, social, and legal-cultural conditions similar to South Korea. Both are East Asian countries with traditions emphasizing relationships, trust, and local community, which can facilitate fraud based on emotional trust rather than clear legal rules. Both have experienced periods of overheated housing and land markets, characterized by small-scale, non-professional brokers with insufficient professional ethics. South Korea’s model, which is not merely a “copy of the West”, has successfully localized law and technology, making it fully feasible for Vietnam if appropriately adapted.

Third, the South Korean model not only relies on legal regulation but also establishes digital infrastructure to prevent fraud at its root. Vietnam currently lacks a nationwide electronic real estate transaction system and has not integrated information on planning, ownership, market valuation, and actual transactions. In contrast, South Korea has developed platforms such as K-RETS, LURIS, and K-APT, which enable authentication, tracking, audit trails, and verification of the entire transaction process. Vietnam can learn from this model to build a “digital real estate transaction ecosystem”, allowing the State to regulate the market intelligently and giving citizens confidence in transactions.

Fourth, the South Korean model creates a transparent and trustworthy market environment, serving as a foundation for attracting investment and minimizing systemic risk. Vietnam is currently promoting the financialization of real estate, with products such as bonds, real estate investment funds, and REITs, but the lack of transparent transaction data poses significant systemic risks. By adopting the South Korean model, banks, institutional investors, and insurance companies could rely on standardized data systems to assess, finance, or insure transactions. This model helps Vietnam’s market shift from “emotional trust” to “institutional trust”, forming a foundation for sustainable market development.

Fifth, this model aligns with Vietnam’s national digital transformation strategy and the goal of building a digital government and digital society. The country is implementing a national digital transformation program, in which the real estate and land sectors are key priorities. However, many localities are slow to deploy land data systems and lack an official, comprehensive online real estate transaction mechanism. Learning from the South Korean model would allow Vietnam to “leapfrog” in digital institutional development, avoiding mistakes from spontaneous and uncontrolled growth.

The South Korean model provides empirical, feasible, and highly adaptable value, especially for developing countries like Vietnam. In the context of increasing fraud, lack of transparency, and strong demand for digital transformation, Vietnam needs to proactively and selectively learn from this model, thereby designing a legal–technological–supervisory ecosystem for a healthy, transparent, and modern real estate market.

VII. CONCLUSION

Fraud in real estate trading platform services has become a serious challenge to the healthy and sustainable development of Vietnam’s real estate market. Practices such as creating “ghost” platforms, defrauding deposit payments, and manipulating price information not only cause direct losses to citizens but also erode trust in market mechanisms and the rule of law. In this context, establishing a sufficiently robust legal and technical system to prevent fraud is an urgent and unavoidable requirement.

Experience from South Korea shows that combining a strict legal framework, advanced digital technology applications, and effective supervisory mechanisms can nearly eliminate fraudulent activities in real estate transactions. The RTMS model, mandatory electronic contract systems, strong sanctions, and comprehensive public data have demonstrated the capacity of a modern state to both enhance market transparency and protect citizen interests. From a policy perspective, Vietnam can fully adopt suitable lessons from South Korea; however, this requires strong political consensus, commitment to institutional reform, and serious investment in digital infrastructure. Only when legal and technological tools operate in a unified manner can we build a transparent, secure, growing, and sustainable real estate market.

Reference materials

1. Law on Real Estate Business 2023, National Assembly of the Socialist Republic of Vietnam, No. 29/2023/QH15, promulgated on November 28, 2023.

2. Civil Code 2015, National Assembly of the Socialist Republic of Vietnam, No. 91/2015/QH13, promulgated on November 24, 2015.

3. Criminal Code 2015 (amended and supplemented in 2017), No. 100/2015/QH13.

4. Law on Protection of Consumer Rights 2023, No. 19/2023/QH15.

5. LIM, S., & HAN, J.. "REAL ESTATE FRAUD AND BROKERAGE MARKET REGULATION IN KOREA", KOREAN JOURNAL OF REAL ESTATE STUDIES (2021)

6. GEORGE A. AKERLOF, THE MARKET FOR “LEMONS”: QUALITY UNCERTAINTY AND THE MARKET MECHANISM, 84 Q.J. ECON. 488 (1970).

7. MICHAEL C. JENSEN & WILLIAM H. MECKLING, THEORY OF THE FIRM: MANAGERIAL BEHAVIOR, AGENCY COSTS AND OWNERSHIP STRUCTURE, 3 J. FIN. ECON. 305 (1976).

8. DONALD R. CRESSEY, OTHER PEOPLE'S MONEY: A STUDY IN THE SOCIAL PSYCHOLOGY OF EMBEZZLEMENT, FREE PRESS (1953).

9. United Nations Office on Drugs and Crime (UNODC[A4] ),

10.Manual on Real Estate Fraud and Money Laundering Risks (2020),

11.https://www.unodc.org/documents/treaties/UNCAC/Real_Estate_Fraud_Manual_UNODC2020.pdf

12.Zhou & Logan, Real Estate Risk Management 134 (2021)

13.Nadav Shoked, Ownership and Deception in Urban Real Estate, 46 Fordham Urb. L.J. 987 (2019)

https://ir.lawnet.fordham.edu/ulj/vol46/iss5/2.

14.Edelman, B. (2014). "Market Design and Transparency in Real Estate Platforms". Harvard Business School Working Paper.

15.(Zhou & Logan, Real Estate Risk Management, 2021)

16.Ronald H. Coase, The Nature of the Firm, 4 Economica (n.s.) 386, 390–91 (1937).

17.Duc Thinh, Van Thi, Luong Son District (Hoa Binh): Một số dự án bất động sản rao bán khi chưa đủ yếu tố pháp lý, People’s Army (24 July 2020, 23:21)https://www.qdnd.vn/phong-su-dieu-tra/dieu-tra/mot-so-du-an-bat-dong-san-rao-ban-khi-chua-du-yeu-to-phap-ly-627909

18.Ngoc An, Bộ trưởng Hồ Đức Phớc chỉ cách tránh lừa đảo trong giao dịch bất động sản, Tuoi Tre (19 June 2023, 17:28) https://tuoitre.vn/bo-truong-ho-duc-phoc-chi-cach-tranh-lua-dao-trong-giao-dich-bat-dong-san-20230619165858978.htm

19.Hoang Anh, Khởi tố 41 người liên quan đến công ty bất động sản lập 'dự án ma' để lừa đảo, Vietnamnet (11 June 22:18)

https://vietnamnet.vn/khoi-to-41-dong-pham-lien-quan-den-cong-ty-bat-dong-san-lap-du-an-ma-lua-dao-2290621.html

20.Lam Thien, Binh Duong: Bán "lậu" bất động sản hình thành trong tương lai, nhiều chủ dự án bị bắt, Economic & Urban (17 July 2022, 14:35) https://kinhtedothi.vn/ban-lau-bat-dong-san-hinh-thanh-trong-tuong-lai-nhieu-chu-du-an-bi-bat

21.Park, J. H., “Digital Transformation of Korea’s Real Estate Market: Legal Framework and Challenges,” Asian Journal of Law and Society, vol. 8, no. 2, 2021.

22.Liu Jiayuan, Reform and Development of Urban Housing Transaction Platforms in China, URB. PLAN. F., no. 6, 2018.

[*] Phan Van Lam, M.A; Email: Phanlamplxh@gmail.com

[1] LIM, S., & HAN, J. "REAL ESTATE FRAUD AND BROKERAGE MARKET REGULATION IN KOREA", KOREAN JOURNAL OF REAL ESTATE STUDIES (2021)

[2] GEORGE A. AKERLOF, THE MARKET FOR “LEMONS”: QUALITY UNCERTAINTY AND THE MARKET MECHANISM, 84 Q.J. ECON. 488 (1970).

[3] MICHAEL C. JENSEN & WILLIAM H. MECKLING, THEORY OF THE FIRM: MANAGERIAL BEHAVIOR, AGENCY COSTS AND OWNERSHIP STRUCTURE, 3 J. FIN. ECON. 305 (1976).

[4] DONALD R. CRESSEY, OTHER PEOPLE'S MONEY: A STUDY IN THE SOCIAL PSYCHOLOGY OF EMBEZZLEMENT, FREE PRESS (1953).

[5] United Nations Office on Drugs and Crime (UNODC), Manual on Real Estate Fraud and Money Laundering Risks (2020), tại: https://www.unodc.org/documents/treaties/UNCAC/Real_Estate_Fraud_Manual_UNODC2020.pdf

[6] Zhou & Logan, Real Estate Risk Management 134 (2021)

[7] Nadav Shoked, Ownership and Deception in Urban Real Estate, 46 Fordham Urb. L.J. 987 (2019), https://ir.lawnet.fordham.edu/ulj/vol46/iss5/2.

[8] EDELMAN, B. (2014). "MARKET DESIGN AND TRANSPARENCY IN REAL ESTATE PLATFORMS". HARVARD BUSINESS SCHOOL WORKING PAPER.

[9] SHOKED, N.. “OWNERSHIP AND DECEPTION IN URBAN REAL ESTATE”. FORDHAM URBAN LAW JOURNAL (2019)

[10] Zhou & Logan, Real Estate Risk Management, 2021

[11] Ronald H. Coase, The Nature of the Firm, 4 Economica (n.s.) 386, 390 - 91 (1937).

[12] United Nations Office on Drugs and Crime (UNODC), Manual on Real Estate Fraud and Money Laundering Risks (2020),

[13] Đức Thịnh, Văn Thi, Huyện Lương Sơn (Hòa Bình): Một số dự án bất động sản rao bán khi chưa đủ yếu tố pháp lý, Quân đội nhân dân (24/7/2020 23:21) https://www.qdnd.vn/phong-su-dieu-tra/dieu-tra/mot-so-du-an-bat-dong-san-rao-ban-khi-chua-du-yeu-to-phap-ly-627909

[14] Ngọc An, Bộ trưởng Hồ Đức Phớc chỉ cách tránh lừa đảo trong giao dịch bất động sản, Tuổi trẻ (19/6/2023 17:28) https://tuoitre.vn/bo-truong-ho-duc-phoc-chi-cach-tranh-lua-dao-trong-giao-dich-bat-dong-san-20230619165858978.htm

[15] Hoàng Anh, Khởi tố 41 người liên quan đến công ty bất động sản lập 'dự án ma' để lừa đảo, Vietnamnet (11/6/2024 22:18) https://vietnamnet.vn/khoi-to-41-dong-pham-lien-quan-den-cong-ty-bat-dong-san-lap-du-an-ma-lua-dao-2290621.html

[16] Lâm Thiện, Bình Dương: Bán "lậu" bất động sản hình thành trong tương lai, nhiều chủ dự án bị bắt, Kinh tế & đô thị (17/7/2022 14:35) https://kinhtedothi.vn/ban-lau-bat-dong-san-hinh-thanh-trong-tuong-lai-nhieu-chu-du-an-bi-bat

[17] Park, J. H., “Digital Transformation of Korea’s Real Estate Market: Legal Framework and Challenges,” Asian Journal of Law and Society, vol. 8, no. 2, 2021, pp. 241 - 260.

[18] Korea Real Estate Portal – www.r-one.co.kr

[19] Liu Jiayuan, Reform and Development of Urban Housing Transaction Platforms in China, URB. PLAN. F., no. 6, 2018, at 45. (Urban Planning Forum)