Don't get taken in by looks of investment apps!

More money always seems appealing to everyone, but the temptation to make money quickly can prove to be costly. Sachin (name changed) experienced this firsthand. He saw an advertisement of a broker app on social media. The ad promised high returns on large investment. Intrigued, he clicked on it, and soon his inbox was flooded with messages. Without much thought, Sachin invested a lump sum of 3 lakh rupees. Two weeks later, he discovered that it was a scam. The fraudulent app had gained his trust as it mimicked a reputable investment app. Sachin isn’t alone to have fallen victim to such scams; such crimes are on the rise. This is known as a pig butchering scam, a form of investment related fraud where cybercriminals create fake investment apps and websites to lure people into investing money with the lure of earning returns.

With the increasing cases of such frauds, stock market exchanges have issued warnings to investors. The National Stock Exchange or the (NSE) has cautioned investors that some individuals or entities falsely claim to be associated with reputed financial institutions. They give Indian and international mobile numbers, WhatsApp groups, Telegram channels, Facebook and Instagram channels. They often show fake certificates of SEBI/stock exchanges.

Apps like Fisdom, Dhan, Fyers, and Choice Broking have also alerted people that their names are being misused to lure individuals into investing.

Now, understand how a pig butchering scam works

Cyber scammers initiate their schemes with ads on social media platforms. Then, they send messages to people. With this purpose, you join a Whatsapp or Telegram group. The name of a real company is used for this. In these groups, stocks are suggested every day. You also receive trading tips. Many times, you may profit from a stock. This gains the trust of the people. After that, the real scam begins. You’ll be asked to download an app and instead of investing directly in shares, you’ll be asked to transfer money to a bank account. In the fake app, this amount will appear as your balance amount. Scammers claim that they don’t trade in the regular market but in the primary market, and you cannot invest directly. That’s why the money has to be transferred to another bank account. But this money goes into the scammers’ pockets; there is no investment in your name. That’s why it’s called a pig butchering scam. During this time, investors are guaranteed a return of 30 to 40 percent per week.

After learning about the modus operandi of these fraudsters, it’s also important to know how to protect oneself from such scams.

First, if anyone contacts you through a social media platform, be cautious. If you see an ad for an app on social media, make sure to check its reviews on the Play Store or App Store. Check the list of registered brokers on the SEBI website. Don’t make any financial decisions under emotional pressure or the lure of high returns. Research thoroughly before any making any investment.