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

5 minutes of reading Last updated: August 2, 2024 | 16:17 IST

Fake ads that lure victims into making investments “recommended” by big-name entrepreneurs or financial firms are becoming a big problem on social media. A 36-year-old woman from Delhi recently fell victim to such a scam while browsing Facebook.

This is what happened

While on Facebook, she came across a link advertising stock investments through Upstox Securities, a well-known trading app in India. Curious, she clicked on the link and was added to a WhatsApp group called “V5-VIP Upstox Services Group.” According to an FIR she later filed, the group offered stock trading advice and eventually led her to a fraudulent conclusion.

The group’s admin, known as Rajat Upstox VIP, lured members into participating in a contest called GTC, promising attractive returns. Following the instructions, she joined the mobile app through the provided link and uploaded her Aadhaar and PAN cards to activate her account. Between July 4 and July 17, 2024, she made 19 transactions worth Rs 24,35,000 across 10 different stock and IPO accounts. The app showed that her investments were growing, convincing her to buy more stocks. However, when she wanted to sell her shares, they refused and insisted that she take a loan instead.

A growing problem

Nidhi Sagar, a resident of North Pitampura, is now one of a growing number of people being duped by such schemes, desperate to get their hard-earned money back. Many of the fake ads can be found on Facebook and Instagram, which are operated by Meta.

Answer from Upstox

In response to the scam, Upstox said: Business standards: “We at Upstox would like to clarify that we have no connection with Rajat Chopra in any form or capacity. When we come to know about such issues, we immediately file complaints with the police.”

“To combat impersonation in our industry, we conduct continuous public awareness campaigns. The safety and trust of our customers are our top priority. We would like to emphasize 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 profits. Investors are requested to remain vigilant, verify all communications and report any suspicious activity immediately,” the broker added.

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

NSE has advised investors not to subscribe to any schemes or products offering guaranteed returns in the stock market as they are illegal. “Investors are advised not to share their trading credentials such as user ID/password or other confidential information with anyone,” the NSE added. It emphasised that high-yield investments generally involve high risks, including fraud, and there is no guarantee of guaranteed returns in the securities market. The exchange urged investors to verify the registered status of the entities on the Sebi website.

The threat of stock market fraud

Online stock investment scams are rampant in India. In recent months, hundreds of people across the country have fallen victim to these scams, losing large sums of money. For example, a man from Thane in Maharashtra was allegedly duped of over Rs 73 lakh on the pretext of trading stocks.

Similarly, a woman from Pune, lured by promises of a 10-fold return, lost Rs 1.8 crore in a stock scam. She was lured by promises of high returns after clicking on a social media link and was added to a phone messenger group that misused the name of a global investment banking giant. In April, a man from Bengaluru lost Rs 5.2 crore after downloading a stock app from WhatsApp.

Many of these ads can be found on WhatsApp, Facebook, Instagram and Telegram.

How to avoid being fooled by scams

Upstox has provided some key measures to help investors avoid scams:

1. Check the legality of the broker: Always do your research before getting involved with any person or platform. Look for SEBI registration and stock exchange membership to ensure credibility.

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

3. Verify communication channels: Pay special attention to the communication methods of brokers offering quick profits.

4. Protect your personal data: Keep confidential information secret, especially from unknown people or suspicious requests. Upstox or its employees or any other registered broker will never ask for personal information without proper verification.

5. Report suspicious activity: Any suspicious activity should be reported immediately to [email protected].

Verified communication channels

Upstox uses the following verified communication channels:

Website: https://upstox.com/

learn: 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 WhatsApp Verified Numbers: +91 9076000526, +91 8976787932, +91 8976787931, +91 9324738915, +91 9321261098

First published: August 2, 2024 | 16:11 IST