WhatsApp investment scams: Scamsters are using social media platforms like WhatsApp and Telegram to trick investors with the promise of fast money. They’re creating fake investment groups, pretending to be famous brands and professionals, and offering phony stock tips and trading courses.
According to ET, scamsters send group invitations to WhatsApp users, claiming to be from a well-known fund house. The messages promise free access to high-quality investment portfolios and daily stock recommendations as part of an online event celebrating the fund’s anniversary in India.
Here’s how scamsters lure WhatsApp users into investment scams:
1. Victims are added to random WhatsApp investing groups.
2. Multiple groups are created simultaneously.
3. The profile of a famous investor and their credentials are shared with group members.
4. Discussions begin in the group, with some members hyping up upcoming ‘lessons’ or ‘opportunities’.
5. Initial stock tips are shared for free, with conflicting tips shared in other groups.
6. Some tips work in favor of certain groups, encouraging members to invest more.
7. Less successful groups are abandoned.
8. Active members are pushed to invest in special programs with promises of bigger rewards.
9. If a victim refuses to invest more or tries to withdraw funds, their account is disabled, and the WhatsApp group is deactivated. Scammers vanish with the victims’ funds.
Scammers impersonating finance experts and influencers
These scamsters employ a very common tactic to impersonate renowned fund managers, financial advisors, and influential figures within the finance community. By leveraging the identities of individuals like Porinju Veliyath and Ajay Kacholia, these fraudsters aim to lend an air of credibility to their operations, preying on investors’ desire for lucrative stock tips, the financial daily’s report said.
ALSO READ | How to avoid financial losses: Take a look at these 6 Daniel Kahneman principles
Santosh Joseph, Founder of Germinate Investor Services, was quoted as saying, “These scamsters prey on investors’ appetite for stock tips, particularly coming from star names.”
They might pose as an investment academy or class, with a ‘professor’ or ‘teacher’ (often the impersonated individual). Discussions in group chats are often scripted, with members expressing excitement about upcoming opportunities or asking about the trading program. Usually, these active participants are affiliates who pretend to be genuine members, adding a false sense of legitimacy to the operation.
Rahul Ghose, CEO of Hedged.in, says, “Messages planted by their own affiliates gives the entire set-up a feel of legitimacy.”
Tactics and operations of investment scams
Some scamsters even mention past trading successes under the ‘teacher’s’ guidance, providing screenshots as evidence. This is to create a fear of missing out (FOMO) among unsuspecting members. They also create a sense of urgency by pushing a ‘limited time opportunity’ or warning of missing out on profitable trades. Another tactic is to offer investors a free ‘trial’ period to test the waters. Initial stock tips may be given for free to build confidence.
Many of these scams operate as ‘pump and dump’ schemes. The scamsters or their associates convince people to buy stocks they already hold. They artificially inflate the stock price through circular trading. Once enough people buy, they sell their shares at a significant profit, causing the stock price to drop sharply. Other scams involve enticing people to transfer money in exchange for supposedly lucrative tips or recommendations. These tips are fake, so scammers create multiple investor groups, suggesting different ideas to each group.
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Ghose points out that different groups receive conflicting ‘buy-sell’ calls. Because some of these ‘ideas’ will succeed, members of those groups are pushed to invest more. Meanwhile, other groups are abandoned, and the cycle repeats.
Red flags: Be cautious of these warning signs
Investors should be cautious and watch for signs of fraud. If you receive a random invitation to join a trading community from unknown contacts, proceed with caution. Avoid falling for promises of quick wealth or guaranteed returns. As Santosh Joseph advises, “Stay away from stock tips, no matter who shares them.”
If an investing group claims affiliation with a trusted name or brand, verify its authenticity by reaching out to the person or company through social media or email, as recommended by Rahul Ghose. They’re likely to identify any scam. Lastly, be wary of requests to send money through unverified links or download third-party apps, as these could be suspicious.
According to ET, scamsters send group invitations to WhatsApp users, claiming to be from a well-known fund house. The messages promise free access to high-quality investment portfolios and daily stock recommendations as part of an online event celebrating the fund’s anniversary in India.
Expand
Here’s how scamsters lure WhatsApp users into investment scams:
1. Victims are added to random WhatsApp investing groups.
2. Multiple groups are created simultaneously.
3. The profile of a famous investor and their credentials are shared with group members.
4. Discussions begin in the group, with some members hyping up upcoming ‘lessons’ or ‘opportunities’.
5. Initial stock tips are shared for free, with conflicting tips shared in other groups.
6. Some tips work in favor of certain groups, encouraging members to invest more.
7. Less successful groups are abandoned.
8. Active members are pushed to invest in special programs with promises of bigger rewards.
9. If a victim refuses to invest more or tries to withdraw funds, their account is disabled, and the WhatsApp group is deactivated. Scammers vanish with the victims’ funds.
Expand
Scammers impersonating finance experts and influencers
These scamsters employ a very common tactic to impersonate renowned fund managers, financial advisors, and influential figures within the finance community. By leveraging the identities of individuals like Porinju Veliyath and Ajay Kacholia, these fraudsters aim to lend an air of credibility to their operations, preying on investors’ desire for lucrative stock tips, the financial daily’s report said.
ALSO READ | How to avoid financial losses: Take a look at these 6 Daniel Kahneman principles
Santosh Joseph, Founder of Germinate Investor Services, was quoted as saying, “These scamsters prey on investors’ appetite for stock tips, particularly coming from star names.”
They might pose as an investment academy or class, with a ‘professor’ or ‘teacher’ (often the impersonated individual). Discussions in group chats are often scripted, with members expressing excitement about upcoming opportunities or asking about the trading program. Usually, these active participants are affiliates who pretend to be genuine members, adding a false sense of legitimacy to the operation.
Rahul Ghose, CEO of Hedged.in, says, “Messages planted by their own affiliates gives the entire set-up a feel of legitimacy.”
Tactics and operations of investment scams
Some scamsters even mention past trading successes under the ‘teacher’s’ guidance, providing screenshots as evidence. This is to create a fear of missing out (FOMO) among unsuspecting members. They also create a sense of urgency by pushing a ‘limited time opportunity’ or warning of missing out on profitable trades. Another tactic is to offer investors a free ‘trial’ period to test the waters. Initial stock tips may be given for free to build confidence.
Many of these scams operate as ‘pump and dump’ schemes. The scamsters or their associates convince people to buy stocks they already hold. They artificially inflate the stock price through circular trading. Once enough people buy, they sell their shares at a significant profit, causing the stock price to drop sharply. Other scams involve enticing people to transfer money in exchange for supposedly lucrative tips or recommendations. These tips are fake, so scammers create multiple investor groups, suggesting different ideas to each group.
ALSO READ | Are debt funds a better way to invest in fixed income than bank FDs?
Ghose points out that different groups receive conflicting ‘buy-sell’ calls. Because some of these ‘ideas’ will succeed, members of those groups are pushed to invest more. Meanwhile, other groups are abandoned, and the cycle repeats.
Red flags: Be cautious of these warning signs
Investors should be cautious and watch for signs of fraud. If you receive a random invitation to join a trading community from unknown contacts, proceed with caution. Avoid falling for promises of quick wealth or guaranteed returns. As Santosh Joseph advises, “Stay away from stock tips, no matter who shares them.”
If an investing group claims affiliation with a trusted name or brand, verify its authenticity by reaching out to the person or company through social media or email, as recommended by Rahul Ghose. They’re likely to identify any scam. Lastly, be wary of requests to send money through unverified links or download third-party apps, as these could be suspicious.
