Scammers create bogus investment apps or websites that resemble legitimate brokers, fund houses or exchanges.
FinTech BizNews Service
Mumbai, March 5, 2025: Investment fraud is one of the most deceptive forms of financial crime, often fueled by social engineering tactics that manipulate the human mind. Fraudsters build trust by impersonating financial experts, fabricating endorsements from reputable organisations or at times using fake videos of social media influencers. They promise extraordinary returns, exclusive investment opportunities, or limited-time deals, pushing individuals to invest without due diligence. Once the individual invests, the fraudsters disappear abruptly or continue extracting funds till the individual realises that he is getting conned. As scams evolve with technology, awareness remains the best defense against these psychological manipulations.
Types of investment frauds
Fake Trading Platforms and Apps: Scammers create bogus investment apps or websites that
resemble legitimate brokers, fund houses or exchanges. Users are initially enticed to deposit
money by showing virtual profits on fake screens. Once they invest substantial amounts, they
are prevented from withdrawing funds.
Stock at discounted prices: Fraudsters promote lesser known, low volume stocks and assure
early access at heavily discounted prices only for select clients. They ask investors to transfer
funds to personal accounts instead of the exchange or broking houses, indicating fraudulent
intention. In this scam, they usually mop-up huge value of funds which is normally in lakhs,
under the guise of creating riches through share trading.
Fake Job scams: Scammers, under the guise of offering employment, persuade victims to
provide write-up’s and share documents. They ask for a nominal fee to establish legitimacy of
the transaction. Subsequently, the victim is deceived into making further commission payments
which typically goes up over multiple interactions, until they eventually recognize the fraudulent
nature of the schemes.
Ponzi and Pyramid Schemes: These scams promise high returns to investors but pay early
investors with funds from newer ones, not actual profits. They collapse when new money dries
up.
How to Stay Safe from Investment Scams
Verify Before Investing: Always check SEBI, RBI, or official regulatory websites for
registered firms
Be Skeptical of High Returns: If an investment sounds too good to be true, it is likely a
scam
Avoid Pressure Tactics: Legitimate investments don’t require urgent decisions
Check Website & Email Authenticity: Look for HTTPS, official domain names, and
avoid clicking on unsolicited links
Never Share Personal or Banking Details: Fraudsters use these to manipulate and
steal funds
Being cautious and well-informed is the best defense against investment scams. Always
research before investing and never trust unsolicited investment offers. Report suspicious
number to the national cybercrime helpline by dialing 1930 or the Department of
Telecommunication (https://sancharsaathi.gov.in/sfc/). Save messages, take screenshots and
document interactions.
