'Exclusive' IPO Deals on WhatsApp Groups, Fake Trading Apps Target Investors
Guaranteed 50-60% return on your investment sounds intriguing but scammers ensure the money never reaches you.
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“Insider tips” from official advisors, “exclusive IPO deals” that investors would regret missing, and polished (and fake) trading apps have been trapping victims into transferring money to unknown accounts. Under the guise of reputable brokerage firms or companies, scammers add investors to WhatsApp groups where other “fellow” investors share success stories and express interest in investing large sums. Significant gains are guaranteed within a specified timeframe. With the urgency to make the most out of special deals, investors are quick to follow the scammers’ instructions and fall into their trap.
Numerous investment scam cases are reported regularly, with official advisories issued to keep investors safe; however, scammers consistently refine their fraud techniques. We help you decode the latest con trick targeting unsuspecting victims, so you can stay ahead of their schemes and safeguard your savings.
Modus Operandi
Exclusive WhatsApp Group: Scammers add you to a popular brokerage or finance group on WhatsApp. The admin posts an introductory message that outlines the rules and explains that the group offers free stock trading advice from a professional. The group’s description provides more details about how the group works and introduces an “assistant” who will assist you with your questions.
A message on the WhatsApp groups listing its purpose and ground rules for participants.
(Photo: Acquired by The Quint)
Fake Trading App: Investors are directed to install a trading app on their phones, for example, ‘SAT FIN’ or ‘MODMA’. The interface of these fake apps appears professional, displaying market data, your account orders, and IPOs.
A screenshot of a fake trading app.
(Photo: Acquired by The Quint)
Initial Gain: The assistant helps you invest in IPOs by creating your account, requiring you to share details or an image of your PAN card. You cannot directly add money to the app, but are asked to transfer funds to different bank accounts under various enterprises’ names. After your initial investment, the scammers execute a successful trade on the first day, which is shown on the app. This further persuades victims of their schemes' legitimacy.
High-Profit IPO: Scammers then pitch an “exclusive” IPO investment while guaranteeing a 50-60% return within a month. In a case reported to Scamguard, a victim was asked to invest at least Rs 5 lakhs, despite the maximum IPO allotment amount for retail investors being Rs 2 lakhs. To appear genuine, they also share a ‘Notification of Award’ that highlights details of shares you purchased.
Scammers send across an official looking 'Notification of Award' listing your IPO details.
(Photo: Acquired by The Quint)
No Withdrawal Allowed: After you transfer money, scammers inflate your balance on the app, which encourages you to invest more. Trouble arises when you request to withdraw the amount. Scammers will tell you that your credit score on the app is low, preventing them from releasing the funds and pushing you to invest further. If you threaten action, they block your account on the app and remove you from the WhatsApp group(s).
Red Flags
Getting added to a WhatsApp or Telegram group without any prior contact.
Promises of guaranteed high returns within weeks or even doubling money overnight.
Pressuring investors for quick deposits to secure exclusive deals.
Trading apps from unverified sources or even on the Play Store or App Store with few downloads and no reviews.
Request for direct bank transfer via unfamiliar accounts instead of brokerage accounts, regulated channels, or recognised platforms.
IPO bids for retail individual investors are exceeding the capped Rs 2 lakh.
What To Do
Verify: Contact the company or the broker firm being impersonated via their official websites and check if the groups or offers are legitimate. Genuine firms do not recruit investors randomly through such channels. Any apps being promoted should have a large number of downloads and user reviews on the app stores.
Decline: Never give away your personal IDs and/or bank account details to unknown entities.
Alert: If you have transferred money to any accounts, please notify your bank immediately and provide them with the transaction details.
Report: Report the incident promptly through the National Cyber Crime Reporting Portal (cybercrime.gov.in) or call their helpline at 1930. You can also submit a complaint via SEBI’s SCORES portal or file one at the local police station. Make sure to gather relevant evidence that can support the investigation.
Share: Inform your circles and communities about the scam and ask them to be cautious of any such alerts.
The Quint's Scamguard initiative aims to keep up with emerging digital scams to help you stay informed and vigilant. If you've been scammed or successfully thwarted one, then tell us your story. Contact us via WhatsApp at +919540511818 or email us at myreport@thequint.com. You can also fill out the Google form and help us take your story forward.
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