Cyber Crime: What Are Investment Scams, All You Need To Know

Investment scams are on the rise with criminals using fake websites, forex schemes, and cryptocurrency cons to steal huge sums of money. Victims, including professionals in Hyderabad, have lost crores of rupees in these scams. With over 20,500 cases reported and losses totalling approximately ₹582 crores, these frauds are a major cyber crime threat.

Investment scams are a big problem. People are often promised huge profits, like turning one rupee into one lakh. It sounds amazing, right? But it's a trick. Cybercriminals make it seem even better with their tactics. They lure people in, take their money, and disappear. The frequency of these scams has increased by a lot now. They're one of the top cyber crimes. There are different types, but they all promise big returns and end up stealing people's money

The following are some examples:

1. Website Based Scams
   Scammers are using websites to trick people. They set up fake deals to catch their victims. For example, you might be browsing the internet when a pop-up appears. It says you can buy expensive phones from a well-known company at a super low price. They claim it's a clearance sale, and if you buy in bulk, it's even cheaper. The pop-up shows pictures, videos, and comments from supposed happy customers. If you fall for it and pay up, that's it. An executive at a big software company in Hyderabad fell for this and paid Rs. 20 lakhs for phones as a reward for her staff. But the phones never arrived, and she went to the police.
2. Forex
   Scammers are using Voice over Internet Protocol (VOIP) calls to target people for forex (foreign exchange) trading scams. They pose as representatives from forex trading companies, promising huge profits if you invest with them. They claim that with the rise in international transactions, there's a high demand for currency exchange, meaning big profits without hefty commissions. They set up fake websites and bank accounts to collect investments. To gain trust, they even pay out some commissions initially. This tricks people into investing more. But once they have enough money, they vanish, leaving their victims broke. For instance, a software engineer from Gachibowli lost 73 lakhs to such a scam.
3. Franchise
   Many companies now offer franchises, which means they let other people open new branches of their successful business. But be careful, because scammers are taking advantage of this. They pose as representatives of well-known companies online. If you show interest, they promise to give you a franchise after you contact them. They'll even send you what seem like legit documents. But once you pay up, they disappear. For example, someone in Hyderabad lost Rs. 26.27 lakhs to a scam promising a KFC franchise. Another person lost Rs. 45 lakhs thinking they were getting a gas dealership.
   

   Stay Alert, Stay Safe (ETV Bharat)
4. Part-time Job
   Scammers are tricking people with fake part-time job offers, and it's becoming a big problem. They advertise these jobs on social media, claiming to be from famous companies. They even send fake appointment letters to hopeful job seekers. They say you can earn money by liking and writing reviews. They might promise payment for writing reviews for businesses on Google Maps. But it's all a scam. For example, a government employee lost Rs. 84.9 lakhs falling for one of these scams.
5. Stock Exchange
   Investing in the stock market is common nowadays, but scammers are taking advantage of it. They advertise online as stock brokers, claiming they can predict which company's shares will rise. They promise quick profits, saying if you invest in the morning, you'll get returns by evening. They even show fake profits in your account to make you believe them. They may also claim to have inside information about upcoming IPOs, promising to buy and sell shares for you at a profit. They ask for your name and account details to use in their app. Once you invest a large sum, the app shows big profits. But when you try to withdraw the money, it's complicated. Even if you refuse to invest more, they pressure you to do so. That's how they scammed Rs. 36 lakhs from one person in Hyderabad
6. Cryptocurrency
   Cryptocurrency is a hot trend, but scammers are taking advantage of it. They contact people through WhatsApp and Telegram, promising big profits. They say if you invest, you'll make lots of money quickly. But once you invest, you can't withdraw your money. They trick you into investing more, thinking you'll get even bigger returns. An IT employee from the Kapra area of Hyderabad lost Rs. 78 lakhs to one of these scams
7. Ponzi
   It's called a Ponzi scam, and it often starts with a WhatsApp call. They claim to be from a stockbroking company and promise big commissions if you join and recruit others. Those who join early get big rewards, which they use to lure in more people. This cycle continues until they've collected a large sum, and then they vanish, leaving everyone else empty-handed. It's a scheme that relies on recruiting new members to pay returns to earlier investors, but it's ultimately unsustainable and collapses when there are no more recruits
   

   Beware of Scammers (ETV Bharat)

In Telangana's Cyber Security Bureau, 20,500 cases have been regsitered and the total loss is Rs.582.3 cr.

What Cops Say?

Speaking to ETV Bharat, Shikha Goel, Additional Director General of Police CID, said the top trending crime in the country, in cyber, is investment fraud.

"They lure you by saying, we'll double your money, in the investment fraud that is stocks, IPO," she said, adding that, "They first communicate to you through WhatsApp, claiming to give you trading tips, how to invest, how much to invest, which IPO, what is trending, which has more money, where you can profit."

The Modus Operandi

According to her, the "agents" will show their fake websites of genuine organisations once the unsuspecting victims start communicating with them and will usher the victims to create accounts in the cloned-fake websites of some well-known companies.

"There, they show it as if you bought those stocks. They also ask you to buy stocks in large amounts so that if you buy 20-30 Lakhs worth of stocks, then you will get them at a cheaper rate," she said. "So not 10-20 you will have to buy them in that large amount," the Director of Telangana Cyber Security Bureau said.

Goel, who is also handling Technical Services, said the fake website will show the buyers look like their stock is worth growing and that the market value has gone up.

"All of this is fake and if you want to withdraw or sell off your stock, they will say you have to buy some more, if you buy more only then you can withdraw, and that way they don't allow you (to exit). So this way a lot of people, especially youngsters, people working in the software industry, in corporate they are losing a lot of money," Goel, who is also the Director State Forensic Science Laboratory, said.

Lure Of Quick Money

The state cybersecurity bureau has been receiving 50 to 60 calls every day, according to Goel, who said, adding that the wing had so far received 58 calls for that day. Goel said the cumulative loss every day would range between one or two crores. This, she said, "is because people fall prey to the lure of quick money."

Basics Of Stock Trading

First, one should understand that Demat accounts are the basis for stock trading. No company will let you create an account to buy their shares as stocks can be sold only through exchanges.

"It does not happen like that, there is no stock that you can buy on a private account without going through a Demat account," she said.

The ADGP suggested that any stock investor should search the company on Google and learn more about the company before you make any investment decision. She also urged the prospective investors not to transfer money to any private accounts to purchase shares. Such basic precautions, she said, will help protect the investors from being scammed.

State/UT wise details of Citizen Financial Cyber Fraud Reporting Management System during the period January 1, 2023 to January 31, 2023

Sl. No.	State	No of Complaint Reported	Amount Reported (Rs in Lacs)	No of Complaints (Put on Hold)	Lien Amount (Rs in Lacs)
1	Andaman & Nicobar	526	311.97	161	26.46
2	Andhra Pradesh	33507	37419.77	9580	4664.14
3	Arunachal Pradesh	470	765.79	127	34.39
4	Assam	7621	3441.8	2163	451.61
5	Bihar	42029	24327.79	11533	2779.41
6	Chandigarh	3601	2258.61	1058	296.67
7	Chhattisgarh	18147	8777.15	5056	898.41
8	Dadra & Nagar Haveli and Daman & Diu	412	326.21	105	40.88
9	Delhi	58748	39157.86	13674	3425.03
10	Goa	1788	2318.25	450	153.22
11	Gujarat	121701	65053.35	49220	15690.9
12	Haryana	76736	41924.75	21178	4653.4
13	Himachal Pradesh	5268	4115.25	1502	370.78
14	Jammu & Kashmir	1046	786.56	253	62.55
15	Jharkhand	10040	6788.98	2822	556.38
16	Karnataka	64301	66210.02	18989	7315.52
17	Kerala	23757	20179.86	8559	3647.83
18	Ladakh	162	190.29	41	10.03
19	Lakshadweep	29	19.58	6	0.51
20	Madhya Pradesh	37435	19625.03	9336	1462.33
21	Maharashtra	125153	99069.22	32050	10308.47
22	Manipur	339	333.03	108	66.94
23	Meghalaya	654	424.2	252	46.71
24	Mizoram	239	484.12	75	35.44
25	Nagaland	224	148.94	73	18.09
26	Odisha	16869	7967.11	5187	1049.34
27	Puducherry	1953	2020.34	568	143.38
28	Punjab	19252	12178.42	4923	1332.66
29	Rajasthan	77769	35392.09	20899	3934.82
30	Sikkim	292	197.92	65	18.01
31	Tamil Nadu	59549	66123.21	17941	6980.72
32	Telangana	71426	75905.62	26148	13137.94
33	Tripura	1913	900.35	488	84.82
34	Uttarakhand	17958	6879.67	4813	708.94
35	Uttar Pradesh	197547	72107.46	44089	5906.86
36	West Bengal	29804	24733.33	6307	1845.97
	Total	1128265	748863.9	319799	92159.56

This was stated by the Minister of State for Home Affairs, Ajay Kumar Mishra in a written reply to a question in the Lok Sabha, on Feb. 6, 2024.