A Pune woman has become the latest victim of a rampant online share trading scam, losing a staggering Rs 3 crore after being lured in by a seemingly attractive offer on Instagram. This incident highlights a concerning surge in such frauds, prompting the Pune Police to warn citizens about this “epidemic.”
The victim, a resident of Mohammadwadi in her late 50s, encountered a captivating Instagram advertisement in January 2024 promising high returns on investments. Allured by the prospect of easy money, she clicked on the link and was subsequently added to a WhatsApp group brimming with messages about alleged “institutional accounts” generating significant profits. After weeks of observing these discussions, the fraudsters enticed her with a “seed amount” of Rs 10,000 deposited directly into her account to kickstart her “investment journey.”
This initial deposit was followed by instructions to download a fraudulent phone application. Over the next month, the scammers relentlessly bombarded her with “investment opportunities,” manipulating her into making numerous significant transfers to 12 different bank accounts, totaling a staggering Rs 3.04 crore. Throughout this period, the rigged app deceptively displayed inflated profits exceeding six times her supposed investments. To further legitimize the scam, they even allowed her to make small withdrawals totaling roughly Rs 1 lakh.
However, when the victim attempted to withdraw her entire balance reflecting a fabricated profit of Rs 20.66 crore, the true nature of the scheme was revealed. The fraudsters demanded a hefty 30% of the inflated profits as “charity” and an additional 10% as “fees” before allowing any withdrawal. Realizing she had been conned, the victim promptly lodged a First Information Report (FIR) with the Pune Cyber Crime Police Station.
This incident is not an isolated one. Just two weeks prior, a Pune-based Chartered Accountant (CA) fell prey to a similar elaborate online share trading scam, losing Rs 3.4 crore, with over Rs 2 crore borrowed from various banks. The fraudsters in this case used a WhatsApp group named after a prominent British financial institution to lure the victim with promises of high returns through “block trade” and “upper circuit trading” strategies.
The Pune and Pimpri Chinchwad police have observed a significant rise in online share trading fraud cases over the past five months, terming it an “epidemic.” Cybercriminals employ a multitude of tactics to deceive potential victims, including:
- Deceptive social media advertisements promising high returns
- Fake investment groups on WhatsApp or other platforms showcasing fabricated success stories
- “Seed money” offers to entice initial investment
- Fraudulent mobile applications displaying manipulated account balances
- Promises of lucrative investment opportunities
The Securities and Exchange Board of India (SEBI) issued an advisory in February 2024, specifically warning against such tactics. SEBI cautioned investors to be wary of fraudsters impersonating SEBI-registered entities and exploiting social media platforms to promote fraudulent investment schemes.
6 Ways To Safeguard Yourself from Online Share Trading Fraud
- Beware of Social Media Bait: Online share trading scams often lurk on social media platforms like Instagram and Facebook. Don’t be lured by flashy ads or testimonials promising quick riches. If it sounds too good to be true, it probably is.
- Verify, Verify, Verify: Before handing over your hard-earned money, thoroughly research the investment platform. Check for SEC or SEBI registration (depending on your location) and independent reviews. Look for a platform with a proven track record and a clear contact channel.
- High Returns = Red Flag: Legitimate investments offer steady, measured growth. If an offer boasts astronomical returns with minimal risk, it’s a major red flag. Remember, the higher the potential gain, the higher the associated risk.
- Stick to Reputable Sources: Never download applications recommended by unknown sources or click on suspicious links. Legitimate investment platforms will have their apps readily available on official app stores.
- Do Your Homework: Don’t blindly jump into any stock market scheme. Educate yourself about the basics of investing and research the specific stocks or instruments involved.
- Report and Stay Vigilant: If you encounter any suspicious activity, report it immediately to the platform, relevant authorities, and financial institutions. Stay updated on the latest online share trading scams and educate others to raise awareness.
Consider seeking guidance from a registered financial advisor. They can help you create a personalized investment strategy based on your risk tolerance and financial goals. By staying vigilant and exercising caution, you can protect yourself from falling victim to these cunning online scams.