Delhi woman loses Rs 24 lakh: Beware of fake investment ads on social media

In recent months, hundreds of individuals across India have fallen victim to stock market investment scams

Fake ads luring victims into making investments "endorsed" by famous entrepreneurs or financial firms are becoming a big problem on social media. A 36-year-old woman from Delhi recently fell victim to one such scam while browsing Facebook.

Here's what happened

While on Facebook, she found a link advertising stock market investments through Upstox Securities, a well-known trading app in India. Curious, she clicked on the link and was added to a WhatsApp group named "V5-VIP Upstox Services Group." According to an FIR she later filed, the group offered stock trading tips and eventually led her to a fraudulent application.

The group administrator, known as Rajat Upstox VIP, encouraged members to join a competition called GTC, promising attractive returns. Following the instructions, she joined a mobile app via a provided link and submitted her Aadhaar and PAN cards to activate her account. Between July 4 and July 17, 2024, she made 19 transactions totalling Rs 24,35,000 to 10 different accounts for shares and IPOs. The app showed her investments growing, convincing her to buy more stocks. However, when she wanted to sell her shares, they refused and insisted she take a loan instead.

 

The growing problem

Nidhi Sagar, a resident of North Pitampura, is now among a growing number of individuals deceived by such schemes, desperately hoping to recover their hard-earned money. Many fraudulent ads are found on Facebook and Instagram, operated by Meta.

Response from Upstox

Reacting to the scam, Upstox told Business Standard: "We, at Upstox, would like to clarify that we have no association with Rajat Chopra in any form or capacity. Upon learning of such issues, we promptly file police complaints."

“To combat impersonation incidents in our industry, we have ongoing public awareness campaigns. Our customers' security and trust are our top priority. We would like to reiterate that Upstox and its employees will never ask for personal or financial information through unofficial communication channels. We do not share stock tips offering guaranteed returns. Investors are urged to stay vigilant, verify all communications, and report any suspicious activities immediately,” the broker added.

The National Stock Exchange (NSE) has also warned investors about entities falsely claiming to be associated with reputable financial institutions and showing fake certificates. "Investors are cautioned and advised NOT to deal with such persons/entities in any manner including participation on their illegal platforms. Such participation is at the investor’s own risk, cost, and consequences as such illegal trading platforms are neither approved nor endorsed by Sebi/Exchanges," the NSE stated.

The NSE advised investors not to subscribe to any schemes or products offering guaranteed returns in the stock market, as these are illegal. "Investors are advised not to share their trading credentials such as user ID/password or any other sensitive information with anyone," the NSE added. They emphasised that high-return investments usually involve high risk, including fraud, and that there can be no guarantee of assured returns in the securities market. The exchange urged investors to verify the registered status of entities on Sebi's website.

Stock market scam menace

Online stock investment scams are rampant in India. In recent months, hundreds of individuals across the country have fallen victim to these scams, losing large sums of money. For instance, a man from Maharashtra's Thane city was allegedly cheated out of more than Rs 73 lakh under the pretext of share trading.

Similarly, a woman from Pune, lured by promises of tenfold returns, lost Rs 1.8 crore in a share trading fraud. She was enticed by the promise of high returns after clicking on a social media link and was added to a phone messenger group misusing the name of a global investment banking major. In April, a Bengaluru man lost Rs 5.2 crore after downloading a stock market app from WhatsApp.

Many of these ads have been found on WhatsApp, Facebook, Instagram, and Telegram.

How to avoid falling prey to scams

Upstox has shared some crucial measures to help investors avoid scams:

1. Check broker legitimacy: Always research before engaging with any individual or platform. Look for Sebi registration and Stock Exchange membership to ensure credibility.

2. Beware of unsolicited offers: Be cautious with unexpected calls, emails, or messages promising quick profits. Block and ignore such communications.

3. Verify communication channels: Pay close attention to the communication handles of brokers offering quick returns.

4. Protect personal information: Keep sensitive information private, especially when dealing with unknown individuals or suspicious requests. Upstox or its employees or any other registered broker will never ask for personal details without proper verification.

5. Report suspicious activity: Promptly report any suspicious activities to cybersafety@upstox.com.

Verified communication channels

Upstox uses the following verified channels for communication:

Website: https://upstox.com/

UpLearn: https://upstox.com/uplearn/

Telegram: https://t.me/TheOfficialUpstox

Instagram: https://www.instagram.com/upstox.pro

Facebook: https://www.facebook.com/upstox

Twitter: https://twitter.com/upstox

YouTube: https://youtube.com/@UpstoxOfficial

LinkedIn: http://linkedin.com/company/upstox

Official verified WhatsApp numbers: +91 9076000526, +91 8976787932, +91 8976787931, +91 9324738915, +91 9321261098