Investment scams surfacing on social media platforms are on the rise. Kotak Securities Limited (KSL) has issued a public advisory for its investors about such scams that are active on social media platforms like WhatsApp, Telegram, Facebook, and Instagram.
Investment groups on messaging apps like Whatsapp and Telegram are using well-known brands and professionals’ identities to attract people into fraudulent stock advice and trading classes. The company has noted that investors should not conduct any financial transactions or investments over these platforms without verifying the legitimacy of the entities involved.
Shripal Shah, MD & CEO of Kotak Securities, said: “We urge all investors to follow official channels only for genuine, comprehensive, and trustworthy research reports, recommendations, and market insights for all investment-related activities.”
The fraud operates through various stages: individuals join various investing groups randomly, multiple groups are formed at the same time, renowned investors’ profiles and qualifications are shared, discussions intensify around ‘lessons’ and ‘opportunities,’ conflicting advice is given in different groups, successful groups promote further investment, unsuccessful groups are left behind, and engaged members are directed towards exclusive programs with greater incentives.
Shah said the investors should understand the risks associated with investments offering high returns.
“Investments offering high returns usually involve high risk, including fraud risk, and there can be no guarantee of assured returns in the securities market. Hence, investors should exercise utmost caution while investing their hard-earned money and refrain from transferring money to unknown bank accounts,” he said.
Earlier this week, HDFC Securities Limited also issued a similar advisory for its investors. It said that customers and users should avoid joining fake WhatsApp groups pretending to be the company.
The company has asked users to not join WhatsApp groups or schemes that promise guaranteed returns in the stock market. These promises are illegal and could trick you into giving away personal information or money.
Sandeep Bhardwaj of HDFC Securities said: “It is crucial for investors to be vigilant against fraudulent activities and to make investment decisions based on thorough research and credible information. Always verify the authenticity of any communication claiming to be from HDFC Securities and ensure you are transacting only through our official channels.”