In this blog, we aim to raise awareness about how these scams work and what precautions you can take to protect yourself.
As India transforms from a saving nation to an investing nation, the promise of easy money is becoming more tempting than ever. Fraudsters are capitalising on this hope of making quick money by offering fake investment opportunities that promise high returns with minimal risk.
Investment fraud has become a major concern among Indians. Whether through phone calls, social media or fake online trading platforms, these scams can drain your savings before you even realise something is wrong.
What is investment fraud?
Investment fraud occurs when scammers promise unrealistically high returns with little or no risk, with the aim of tricking people into investing their money. These fraudsters often claim to be financial experts, using fake documents and testimonials to build trust. They create professional-looking websites, display false performance reports, and use familiar financial terminology to appear legitimate. Although the methods may vary, the goal remains the same: to steal your money.
Scammers rely on the fact that many investors are unaware of common red flags. As these scams evolve, it is important for investors to stay informed and vigilant.
How scammers operate:
Investment scammers use a variety of tactics to make their schemes appear legitimate. A common scheme prevalent today involves the following events:
- Initial contact through various channels: Scammers usually make contact via phone calls, social media platforms, email, text messages, or instant messaging apps. They may also use fake investment websites, fake news articles, or deep fake videos of celebrities endorsing their schemes. They attempt to attract attention by offering free events, content, or videos that claim to teach how to get rich.
- Group manipulation on messaging apps: Victims are often added to groups on platforms such as WhatsApp or Telegram, where they are directed to open trading accounts through fraudulent apps. In these groups, fraudsters create a sense of excitement and urgency, thus leading victims to invest as much money as possible.
- Incentives to invest more: After a small initial investment, scammers send them fake reports showing large profits. Imagine you invest Rs 10,000 and you receive a message telling you that your account balance has grown to Rs 15,000 overnight. This tactic builds trust and encourages the victim to invest larger amounts, believing that they are making significant profits.
- Sudden loss of access and communication: When the victim tries to withdraw their money, they discover that access to the funds is blocked. At this point, communication with the scammers ends abruptly, leaving the victim unable to recover their investment.
These can easily fool people who are new to investing or who want to make quick profits.
Protection to prevent investment fraud
To protect yourself from investment fraud, it is important to follow these precautionary steps:
- Be suspicious of unrealistic claims: Stay away from any offer that guarantees high returns without any risk. Legitimate investments are always associated with a level of risk, and any claim to the contrary should immediately raise suspicion.
- Verify the investment: Always confirm whether the entity is registered with SEBI or any other regulatory body before investing. You can visit the official website of SEBI to check the registration details of the investment firm or platform.
- Do not respond to unsolicited messages: Avoid unsolicited investment offers received via phone, email or social media. Fraudsters use these to initiate fraud, and once you respond, they may pressure you to make hasty decisions.
- Keep your personal information safe: Never share sensitive information such as bank account details, OTPs or passwords. Scammers often ask for these details to steal your identity or money. If an investment platform asks for this information, it is likely to be a scam.
- Report suspicious activity: If you notice an investment scam or fall victim to it, report it immediately. You can contact the National Cyber Crime Helpline by dialing 1930 or report the matter on cybercrime.gov.in. If you have made any unauthorized transactions, immediately inform your bank for assistance.
Conclusion:-
Investment frauds are becoming increasingly complex, making it necessary for investors in India to remain vigilant. By understanding how these scams work, recognizing the red flags, and following precautionary measures, you can save your hard-earned money.
