What is share trading scam and how to protect yourself
What's the story
A 56-year-old man in Bengaluru lost ₹6.54 crore to an online share trading scheme, which promised a 1,500% return on investments.
The victim was added to a WhatsApp group, lured into a fraud investment app, and finally asked to route money into his 'investments' via certain bank accounts.
After realizing he could not withdraw his earnings, the victim approached the police.
To make sure you don't suffer a similar fate, here are some steps to protect yourself from such scams.
Guide
Follow these steps to stay safe
Do not be fooled by investment tips which appear out of the blue on social media, via phone calls, or even text messages.
Secondly, if somebody promises you guaranteed high returns with little to no risk, it is a major red flag.
Always be cautious while clicking on links/downloading investment apps that appear suspicious, and never share your Demat account credentials with anyone.
Finally, don't let anyone pressure you into transferring money to unknown bank accounts. Always conduct research beforehand.
Scam initiation
The Bengaluru victim was lured with 'trading and investment classes'
The scam started when the victim got a WhatsApp message on August 11, inviting him to join a group for "trading and investment classes."
He was then added to a WhatsApp group called 'Nuuama Elite Group' by a person named Aniketh Nerkar.
For the next month, he attended online sessions where different stock market investment strategies were discussed.
Some tips were even proven correct, further convincing the victim of the group's legitimacy.
Fraudulent transactions
Scammers used fake app to siphon off money
The scammers lured the victim with a fake trading app to siphon money.
Between August and October 14, he deposited ₹6.54 crore into 12 different bank accounts associated with the app.
The app always showed high returns on his investments in stocks and IPOs, making him think he was earning huge profits.
However, when he attempted to withdraw his supposed earnings, the fraudsters demanded an extra fee of ₹2.5 crore, and that's when he realized he had been duped.
Ongoing investigation
Police investigation underway to trace money trail
After the victim's complaint, police have launched an investigation into the scam. They have frozen the main bank accounts used in the transactions and are now tracing the money trail.
"We have checked the money trail, and it looks like the money has been transferred to mule accounts," a police officer said.
This case is similar to another major cybercrime incident last year, where a retiree lost ₹9.14 crore in a similar 'FedEx' scam.