A 60-year-old retired resident of Mumbai has become the latest victim of a growing trading scam. The victim was duped of Rs 2.56 crore through an elaborate online share trading scam where the scammers lured him to invest in a fake company on the pretext of huge returns.

The scam started when the victim was contacted on WhatsApp from an unknown number. According to the TOI report, the scammers added him to a WhatsApp group called “KK (Fortune Centre)” in December 2023. The group allegedly had several administrators with nicknames such as Account Opening Manager, Chaman Singh and Neeta Singhania, who fooled the victim into believing that they were associated with a private US company that invests in the stock market.

The scammers also gave the victim a link to a website where he was instructed to enter his details and create a virtual account. This virtual account appeared to be legitimate and showed profitable returns on investment, and the victim believed what he saw. In February, the victim made his first investment of Rs 50,000 under the guidance of Singh and Singhania and saw profits in his virtual account.

As the victim saw his alleged profits increasing, he continued to invest more money believing in the authenticity of the operation. The fraudsters even went to the extent of sending fake share certificates through social media to further convince him about the legitimacy of his investment. They provided specific bank accounts for the victim to transfer his money to, allegedly to invest in shares.

However, the situation changed when the group administrators claimed that the company had suffered losses in the stock market and asked for an additional 20 per cent of the victim’s investment to compensate for the loss. When the victim suggested deducting this amount from his shown profits and requested for his investment and profits to be returned, the fraudsters refused. Following this, the victim became unable to contact other group members and his access to the virtual account was blocked. Realising that he had been cheated, he approached the police.

Later, the victim filed a complaint against the fraudsters.

This is not the first case of investment scam

Notably, this incident is yet another example of the growing number of online trading scams, where scammers are duping people after contacting them on WhatsApp and then creating an illusion of legitimacy and profits to separate victims from their money. The use of a virtual account to show fake profits is a key strategy to build trust and encourage further investment. When it comes time for victims to withdraw their money, they face obstacles, and eventually their access is cut off. This type of scam underscores the importance of skepticism and due diligence when dealing with online investment opportunities, especially those that come unsolicited via social media or messaging apps.

How to stay safe?

Here are some steps you can take to stay safe:

• Before getting involved in any investment opportunity, research the company and the individuals involved. Check out reviews, official websites and check if they are registered with the relevant financial authorities.
• Contact the company through the official contact details available on their legitimate website to verify the authenticity of the offer.
• Be wary of unsolicited messages or invitations to investment groups sent via social media or messaging apps. Genuine investment opportunities are rarely found through these channels.
• Scammers often use tricks to pressure you into making a decision. Take time to investigate and never make hasty investment decisions.
• Be wary of promises of high returns with little or no risk. Legitimate investments have inherent risks, and no real investment can guarantee high returns.
• Ask for detailed information and official documentation about the investment. Legitimate companies should have no problem providing detailed information.
• Never share personal or financial information on unverified links or platforms. Make sure the website is secure (look for HTTPS and padlock symbol in the browser).