Social Media Influences Stock Trading Scam

Fraudsters are getting very sneaky with how they target people interested in online trading. The market regulator noted that fraudsters are luring victims through online trading courses, seminars, and mentorship programs related to the stock market.

Fraudsters leverage social media platforms such as WhatsApp or Telegram, and Facebook with advertisements regarding free stock market tips and insist the victims to join the premium/VIP groups. Online communities on social media have a big impact on the stock market these days. Places like Reddit and Twitter are where lots of individual investors gather to talk about stocks.

Victims receive advertisements on social media platforms or WhatsApp or other messaging platforms promoting free trading tips classes. These ads are designed to attract individuals interested in stock trading. When victims click on the advertisement, they are redirected to an unknown WhatsApp group or messaging group. Fraudsters use these groups to establish communication with the victims.

Fraudsters communicate with the victims through these WhatsApp groups and persuade them to invest by offering free trading tips. They make enticing claims about potential profits in stock trading.

Then, victims are asked to install trading applications provided by the fraudsters for further guidance in trading stocks and earning profits. These applications are not registered under the Securities and Exchange Board of India (SEBI).

Victims register on the trading applications and start stock trading based on the fraudsters' recommendations, they deposit money into bank accounts specified by the fraudsters.

In most instances, cyber criminals also share fake screenshots of the profits earned by other clients and also transfer money to the victim’s bank account to win the victim’s confidence. There is a need to verify the authenticity of the trading platform, and regularly review and reconcile your investment statements and transactions.

When victims attempt to withdraw their supposed profits from the digital wallet, they are informed that they can only do so once they reach a certain threshold, typically around ₹50 lakh or above.

At a certain point, victims are asked to pay a tax amount on the profits earned. If they refuse, all communication is halted, and the victims realize they have been scammed.

Hence, be wary of unsolicited investment advice from unknown sources on social media, and always verify information through reliable sources. Additionally, consider consulting with a financial advisor before making any significant investment decisions.