Everyone wants to make a quick buck. In fact, when an investment promises great returns, that is always an exciting prospect. And since we have heard stories of people who have become billionaires just by investing in the stock markets, we feel that we should never miss out on a chance when we come across one.
It is this mindset that many fraudsters target. And a great way for them to reach out to unsuspecting people are WhatsApp and Telegram channels.
Such scams have made it to the news. A 32-year-old woman based out of Gurugram was added to a Telegram channel in January. The members on the channel posted about their daily returns and a ‘guru’ posted investment tips plus provided reading material to invest successfully in the markets.
Slowly she gained trust and invested a few thousand rupees. Very soonher portfolio increased in value (which she could see on her dashboard) and of course she was happy that she was getting good returns. In fact,her investment had apparently touched the Rs 25 lakh mark and then one day her investments crashed. There was no way she could get in touch with her advisors on the channel and retrieve her money. Finally,she approached the cops. Like her, 200 more people on the telegram channel were victims of the same scam.
The Scam
Lately, scammers have become increasingly clever and sophisticated. They frequently fabricate fake profiles or WhatsApp groups where they pose as well-known social media influencers, portfolio managers, or reputable financial advisors.
“They use these platforms to promote micro-cap or small-cap stocks without conducting legitimate research, persuading individual investors to put their money into high-risk assets. Sadly, this often leads to substantial financial losses, leaving these investors disheartened and wary of re-entering the market,” says Samir Shah, Head - Online Business, Axis Securities.
“These groups may deceive customers to share sensitive information and transfer funds by promising high returns,” says Sandeep Bhardwaj, CDO & COO of HDFC Securities.
How To Stay Safe
Investors should follow a few basic rules so that they are not tricked by such scamsters.
"It is crucial for investors to be vigilant against fraudulent activities and to make investment decisions based on thorough research and credible information,” says Bhardwaj.
Always follow research recommendations from SEBI-registered advisors, which can be easily verified on the SEBI website and conduct basic research on the company, understanding factors such as its operations, profit generation, sales volume, and more. While fraud is one thing, following finfluencers blindly for investment advice is also something one should avoid.
“If a retail investor is unable to conduct this basic research, it's advisable to cross-verify recommendations with their broker's advisory team or consult a trusted expert,” says Shah.
Your broker will never approach you through an unofficial channel and give you stock recommendations. They will also not ask you to share sensitive information or ask you to transfer money outside their official platforms. Any of these are red flags and should be enough to warn you that you are dealing with fraudsters. Better be safe than sorry.
