BEWARE OF FAKE INVESTMENT APPS

BEWARE OF FAKE INVESTMENT APPS :

The scam begins with posting fake advertisements on social media platforms like Facebook, Instagram, and X (formerly Twitter). The victims are lured in with promises of high returns on stock market investments.

Once you show interest in the scheme , you are added to WhatsApp group . The other members in the group would be sharing stories of their making huge profits through the apps recommended in the group .
Then you would also download such fraudulent apps that appeared to offer genuine investment opportunities. These apps display the names of well-known stocks and financial instruments to trick you into believing they are legitimate.

once you have installed the fake apps and invested your money, you will initially see good returns displayed on the dashboard . Them you will be encouraged to invest more. But these returns are purely fabricated numbers. When you try to withdraw their money, you will be asked to pay additional charges like statutory taxes or brokerage fees. This is merely ploy to extract more money from you . Once the fraudsters have extracted as much money as possible, they cut off all communication and disappear.

MODUS OPERANDI OF PONZI SCHEMES :

Here's a breakdown of the modus operandi used by fake investment PPAs (Ponzi schemes disguised as investment platforms):

1. Attractive Promises:

   • Offer unrealistically high returns with low to no risk.

   • Promise guaranteed profits and capital appreciation.

   • Use sophisticated marketing campaigns and testimonials to build trust.

2. Initial Investment:

   • Convince victims to invest a relatively small amount initially.

   • Once trust is established, pressure them for larger investments.

3. Early Returns:

   • Pay out some initial profits to convince victims of the legitimacy of the scheme.

   • These early returns are often funded by the investments of new entrants, not actual profits.

4. Snowball Effect:

   • Rely on a continuous influx of new investors to sustain the scheme.

   • As the number of investors grows, so does the amount of incoming funds.

5. Disappearing Act:

   • Once the inflow of new funds slows down or stops, the operators abscond with the remaining money.

   • They may shut down the platform, disappear without a trace, or create a new scheme under a different name.

6. Tactics:

   • High-Pressure Sales: Create a sense of urgency to pressure victims into investing quickly.

   • Social Proof: Use testimonials and endorsements from seemingly credible sources.

   • Complex Investment Models: Employ complicated financial jargon to confuse victims and hide the true nature of the scheme.

   • Leverage Technology: Use sophisticated websites, apps, and online platforms to appear legitimate.

How to Protect Yourself:

• Be Skeptical: If an investment sounds too good to be true, it probably is.

• Do Your Research: Verify the legitimacy of the platform and its operators.

• Avoid High-Pressure Tactics: Don't rush into decisions; take your time to think it through.

• Consult with a Financial Advisor: Seek professional advice before making any investment decisions.

• Report Suspicious Activity: If you suspect a scam, report it to the relevant authorities.

Remember: If you've been a victim of a Ponzi scheme, contact the police immediately and seek legal advice.

MORE ABOUT THE SCAM :

The total quantum of scams assessed in India for the year is approximately ₹11,333 crore. This figure is based on data from the Indian Cyber Crime Coordination Centre (I4C) for the first nine months of 2024.

SENIOR CITIZENS AND THE SCAM :

Senior citizens are often more susceptible to falling victim to scams. The recent retirees who would have received retirement benefits are prone to lose all their money received from their earlier employer . Several factors contribute to this vulnerability

1. Trust and Generosity: Senior citizens are often more trusting and generous by nature, making them easier targets for scammers who exploit these qualities.

2. Loneliness and Isolation: Many seniors live alone or have limited social interactions, making them more vulnerable to emotional manipulation and isolation tactics used by scammers.

3. Technological Challenges: Not all seniors are tech-savvy, making them less likely to recognize and avoid online scams.

4. Financial Security Concerns: Seniors may be more eager to seek investment opportunities to supplement their retirement income, making them prime targets for fraudulent investment schemes.

5. Cognitive Decline: As people age, cognitive decline can impact decision-making abilities, making it harder to identify and avoid scams.

SOME EXAMPLES OF SUCH SCAMS :

Almost , on daily basis , we would be receiving news of victims approaching police after they have lost huge amounts of money , some times in crores. The phenomenon is seen all over the country .

Some recent episodes reported :

1. Fake stock brokerage racket busted in Ahmedabad (July 2024)

2. HPZ Token: A cryptocurrency-based mobile app that promised high returns on investments in Bitcoin mining. The Enforcement Directorate (ED) in India attached assets worth ₹106.2 crore linked to this scheme.

3. Kolkata ponzi scheme in stock trading (August 2024) : Scamsters had promised 40 % return on the investment

4. Pune Day trading scam : In June 2024, the Pune Police and Cyber Crime Cell arrested a group involved in a fake day trading scheme. The platform designed to mirror real stock market data but manipulated it to display fake profits. This encouraged investors to pour in more money, which they ultimately lost when the platform shut down.

5 . Fake share trading app scam (Mumbai, April 2024) : Almost similar to Pune scam

If you fall prey to a scam :

Suppose you unfortunately become a victim of financial cybercrime like Debit card / credit card misuse , OTP Fraud or on-line banking frauds , or any other cybercrime like social media , cryptocurrency fraud , ransomware , hacking , phishing , digital arrest , KYC frauds etc. In that case,

1. you can register your complaint on the portal of Home Ministry , Government of India called " National Cyber Crime Portal " . You can also call helpline number 1930 for the purpose of registering your complaint . A complaint can be lodged on a financial fraud that happened anywhere in India . A foreigner can also complain if the crime has happened in India or the perpetuator is Indian . Initially, you must register your name and a Indian mobile number in the portal . You will receive a OTP . On entering the OTP , you will be able to file the complaint. OTP will be valid for 30 minutes . Once your complaint is registered , you will get confirmation message in the portal itself .

2. You can also approach local police and lodge your complaint