Mumbai-based Shishir Kumar (name changed), a retired director of a public sector unit (PSU), wanted to dabble in online trading. By clicking a link on a Facebook ad, he was added to a WhatsApp group. He was also 'trained' by experts representing a foreign investment firm. He 'invested' nearly Rs40 lakh but could not withdraw more than Rs1.50 lakh. After realising that he was 'royally' duped, he filed a complaint with the Mumbai police,
says a report from Times of India (ToI).
Similarly, a 48-year-old man from Navi Mumbai had allegedly been duped of Rs1.07 crore after being lured by fraudsters into share trading for good returns.
An 88-year-old retired chartered accountant (CA) from Ahmedabad says cyber-fraudsters defrauded him of Rs1.97 crore between February and April this year, by falsely promising substantial returns from online stock trading. The octogenarian was asked to log into a website 'app.alicexa.com' operated by the scammers. He invested Rs1.97 crore and can see his 'investment' increased to Rs5 crore on the website. When he wanted to withdraw Rs1.71 crore, he was asked to pay 15% tax (!). He paid Rs18.70 lakh for the 'tax' and then they demanded 1% of the total asset value to withdraw the money. Sensing something not right, he approached police, says
a report from Weu Network.
All three incidents reveal how scammers (operating in gangs) engage with the victim for a fairly long time to build their trust and then scam them instead of the usual 'hit and run' approach. This method or modus operandi is popularly known as 'pig butchering'. The phrase alludes to the practice of fattening a pig before slaughter, which originated in China, and then went global during the pandemic.
In most recent scams, be it a stock investment, courier scam or sextortion, it is noticed that fraudsters engage with the victim and gain his/ her trust by using authentic-looking credentials. For stock investment scams, there may be an authentic logo, app or website that appears similar to official ones. In courier scams, fraudsters pretend to be law enforcement officials from the police, customs or intelligence bureau (IB). Such fraudsters operate in gangs, where each person plays a designated role to perfection! Sometimes, they slip up and alert victims who are aware of how law enforcement officials work and are tipped off.
The 'hit and run' approach continues to be used by fraudsters working in smaller gangs. For example, those from the infamous Jamtara or the Mewat regions chat with victims to try and get as much information as possible over a phone call.
Incidentally, you must know that many businesses also operate on the borderline of illegality and are in the business of creating new addicts. In a cricket-crazy country like India, many youngsters get easily hooked on gaming apps to the point of addiction. I know of a young office-goer, Suraj, who has a run-up debt of over Rs12.5 lakh playing games on his mobile phone.
According to the Reserve Bank of India
(RBI)'s annual report, during FY23-24, the number of frauds in the banking sector increased to 36,075 cases from 13,564 cases a year ago. However, the amount involved in these fraud cases fell 46.7% to Rs13,930 crore from Rs26,127 crore in FY22-23.
RBI says, "An assessment of bank group-wise fraud cases over the last three years indicates that while private sector banks reported the maximum number of frauds, public sector banks (PSBs) continued to contribute maximum to the fraud amount. Frauds have occurred predominantly in the category of digital payments (card and internet) in terms of number. In terms of value, frauds have been reported primarily in the loan portfolio."
"While small value card and internet frauds contributed the maximum to the number of frauds reported by the private sector banks, the frauds in public sector banks were mainly in loan portfolio," the report says.
Let's go back to the first case of Mr Kumar. According to the report, he is among 266 victims who approached the Mumbai police in the first four months of this year after falling victim to investment or stock market scams. In comparison, 80 such cases were registered throughout last year. Officers told the newspaper that investment fraud follows credit card scams in financial crime prevalence in the city. This year, till April-end, 78 arrests were made for investment fraud, the report says.
For stock investment scams, fraudsters create attractive advertisements about free trading, stock tips, stock trading classes, pre-initial public offering (IPO) investment schemes, and stock market investment apps or websites. These advertisements are promoted via social media channels along with a genuine-looking image of the company or 'celebrity' person to lure unsuspecting victims.
In many cases, these fraudsters are found impersonating stockbroking firms, financial advisers, or even regulatory bodies like the Securities and Exchange Board of India (SEBI) by using their names and logos on the app or website to gain trust.
Once the victim clicks on the advertisement, she is added to a group with an 'attractive name' (like 'Stock Trading Ka King', or 'Stock Khazana') on WhatsApp or Telegram. She is then lured and encouraged to invest money by offering free trading tips to buy and sell stocks and IPO allotment. After a few days, the victim is asked to install trading applications the fraudsters provide to earn huge profits.
However, this bogus app or platform displays fake profit, IPO allotment, investments and unrealistic returns, fostering the victim's trust. When the victim tries to withdraw her profit, she is told it is possible only once her profit and earnings exceed a certain threshold. Trusting it, the victim continues to invest and lose more money.
Here are a few suggestions to follow before parting with your hard-earned money to earn a 'bumper profit' from investment:
1. Never invest in a product that you do not understand. The same applies to the scrip of a company whose business you do not understand.
2. Nobody earns a quick and bumper profit from stock market investment in a day or two. Any investment, including the stock market, must be for the long term to give you returns that are at least on par with other investment products available in the market.
3. Always verify the details of the sender before acting on any email or text message from unknown sources.
4. Before entering any confidential information on the stockbroking platform or stock investment app, re-verify its authenticity. All legitimate financial institutions and regulatory bodies have official domains and email addresses.
5. Beware of investment schemes assuring abnormally high returns or offers that sound 'too good to be true'.
6. Do not click on suspicious links or advertisements from untrustworthy sources.
7. Beware of unsolicited investment tips received on social media.
8. Do your proper research before investing money and do not fall prey to investment opportunities from unknown people or companies.
9. Refrain from dealing with unregulated financial entities operating on social media. Ask, check and verify credentials, including the SEBI registration details of the person or entity offering you the investment opportunity.
10. Knowledge is your best defence against any fraud. Empower yourself with knowledge about financial products for a safer investment journey.
How To Report Cyber Fraud?
Do report cybercrimes to the National Cyber Crime Reporting Portal http://cybercrime.gov.in or call the toll-free National Helpline number, 1930. To follow on social media: Twitter (@Cyberdost), Facebook (CyberDostI4C), Instagram (cyberdostl4C), Telegram (cyberdosti4c).
If the fraud is related to your bank account, you need to immediately send an email to the official email ID of your branch (you can find it on the bank's website or your passbook) with a copy to the bank's customer care. Even if you have called the official number for customer care, you must still send an email describing your conversation with the bank executive, along with the time, date, and duration of the call. This will be helpful if you face a liability issue with the bank.
1) Airtel charged me Rs. 25/- claiming they created a virtual card for my Airtel wallet/payment bank account. Not even scheduled banks are supposed to do that without informing the customer.
2) Upon renewal of my DTH account, Airtel without my knowledge added some irrelevant packs to my account resulting in depletion of my money in just 10 days.
Is Sunil Mittal Bharati any different from these online fraudsters?
It is the TRAI who has to be blamed for lack of an iron fist.