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Surge of Investment Scams via WhatsApp, Facebook, X, and Telegram in India

Photo Credit: Reuters

Recent findings from cybersecurity firm CloudSEK highlight a sharp rise in investment scams across major social media platforms in India. Between January and June 2024, the firm uncovered staggering numbers: over 29,000 fraudulent investment ads on Facebook and a whopping 81,000 fake investment groups on WhatsApp. These scams, leveraging platforms like X (formerly Twitter) and Telegram as well, have targeted unsuspecting investors with promises of quick and substantial returns.

The report exposes the sophisticated tactics employed by fraudsters, including impersonating reputable financial entities and professionals. Victims are lured into these fake investment groups where they are shown falsified earnings proofs and promised high returns, only to find themselves swindled of their investments. Such operations involve stolen data, counterfeit profiles, and manipulated trading platforms to facilitate financial fraud.

CloudSEK’s research also identified over 81,000 deceptive profiles on X misusing the names of financial institutions, further illustrating the scale of deception rampant on social media. The primary targets of these scams span geographies including India, Malaysia, USA, Thailand, and Vietnam.

According to the Indian Cyber Crime Coordination Centre (I4C), between January and April 2024, Indians lost approximately 17.6 billion due to such cyber scams. The modus operandi involves acquiring data through targeted social media ads, unsolicited direct messages, fake investment groups, and SMS invitations. The report outlines an organized structure where criminals purchase hacked stock trading data from brokers operating in underground forums.

“These brokers supply the data to organized crime syndicates orchestrating large-scale trading scams,” notes the report. “They employ handlers and actors to pose as successful investors and lure victims through social media, particularly via WhatsApp groups.”

The landscape of investment scams in India has witnessed a surge, driven by the pervasive use of messaging platforms like WhatsApp and Telegram. Fraudsters exploit the credibility of financial professionals and influencers to entice unsuspecting investors into fraudulent schemes promising quick returns.

CloudSEK’s threat intelligence report sheds light on the tactics used in these scams, revealing over 1 lakh reported investment scams in 2023 alone. From January to April 2024, these scams resulted in losses of Rs 14.2 billion from 20,043 trading scams and Rs 1.2 billion from 4,599 digital fraud cases.

The report further details how organized criminals purchase data from brokers who obtain it from breached stock trading sites. These brokers then sell the data to crime groups conducting scams across multiple countries. The criminals deploy handlers and actors who pose as successful investors, using WhatsApp and other platforms to deceive victims with fabricated success stories.

A notable tactic involves the use of Indian phone numbers associated with WhatsApp Business accounts to appear legitimate, often obtained fraudulently through illicit means. The report emphasizes the critical need for vigilance in identifying and thwarting these deceptive practices.

Primary types of scams identified include cryptocurrency and stock trading scams. In cryptocurrency scams, victims are persuaded to invest in fake platforms promising lucrative returns, while stock trading scams lure victims with similar promises in traditional markets. The most affected countries include India, Malaysia, USA, Thailand, and Vietnam.

The report concludes by stressing the urgency of awareness and vigilance in detecting and preventing these increasingly sophisticated scams. Fraudsters continue to exploit the reach and anonymity of social media platforms, necessitating proactive measures to safeguard investors from financial exploitation.

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