Seasoned stock market traders fall victim to massive online fraud

Bengaluru: A 70-year-old former central government employee and a 43-year-old private company accountant fell victims to stock market scams, losing Rs 3.75 crore and 1.1 crore, respectively.

In both the cases, filed with the South CEN police station, the victims have at least five years of trading experience. Investigators are not surprised. “Scamsters laying traps for experienced stock market traders has emerged as a trend in the recent months,” the investigator told DH.

The cases also reveal that regular investors scouring for tips to increase their returns fall victims to scams. Fraudsters set up imitations of popular trading websites and dubious social media groups to trap the unsuspecting victims, the officer said.

Modus operandi

In both cases, the victims were added to WhatsApp and Telegram groups with 15 or 20 members. The groups would then be flooded with messages from the members, declaring hefty profits they had earned in thousands or in lakhs to deceive the victims.

During the investigation, police found that most of those numbers from which the messages had been posted were operated with bots or by fraudsters. Most of them were switched off when contacted.

Fraudsters sent a link to the phone of Rakesh (name changed), who lost Rs 1.1 crore in the scam, which took him to an app that he downloaded. The link to the app “Tiger Globel” was sent after Rakesh agreed to invest through their institution. The group he was part of was called “Tiger Globel Financial Institution”.

He created an account in the app following the directions of the fraudsters. He transferred his investments to the bank accounts sent by the fraudsters to buy stocks. His investments reflected in the app. Rakesh kept transferring money until he realised that he had been scammed as he could not withdraw the investments after multiple attempts.

"Profits reflected in the apps were through simulation by fraudsters,” the officer said.

"The fraudsters displace or rearrange a few letters in the name of the original companies to create a website or an app and deceive people into investing,” the officer told DH, adding that usually apps that are banned and dubious are made as APKs and shared to victims as they are forbidden from traditional app downloading platforms.

In the senior citizen’s case, though the modus operandi was similar, he was made to attend daily classes on investment tips. He used a different app. “Those were his lifetime's earnings. He had just moved to Bengaluru from Chennai,” the officer said.

Beware! 

On receiving complaints, the police will write to the Criminal Investigation Department (CID), who verify the online groups and websites and remove them from the internet.

What investors should avoid?

1) Random WhatsApp and Telegram groups.

2) Apps from dubious developers.

3) Third party APKs.

4) Investments through direct bank account transfers.

5) Using investment platforms without background checks.