Introduction
Hey everyone! Today, we are going to talk about a very important topic: Trading Scams in the Stock Market. These scams are tricky and can happen to anyone. We will share a story to help you understand how these scams work and how you can protect yourself.
The Story of a Building Supervisor
The Happy Beginning
Once upon a time in Jaunpur, Uttar Pradesh, there was a building supervisor from a lower-middle-class family. He worked hard and hoped for a bright future for his son. His son was very smart and hardworking. Thanks to his hard work, he got into IIT, one of the best engineering colleges in India, with a B.Tech course and even received a scholarship.
The Big Dream
Everyone in the family was very happy. They were proud of their son’s achievements. But, when the son was in his third year of IIT, something unexpected happened. A man named Fisdum approached him. Fisdum claimed to be a stockbroker and promised the son that he could make a lot of money quickly by following his trading strategies.
The Trap
The son was excited. He thought he could become rich quickly. So, he took his 2 lakh rupees, which was his scholarship money meant for his next semester, and gave it to Fisdum. Unfortunately, Fisdum was not a real broker. He was a scammer pretending to be legitimate. The son’s 2 lakh rupees were gone. This is a common example of a Trading Scam in the Stock Market.
The Rise of Trading Scams After COVID
More Scams, More Victims
After COVID, such scams have increased a lot. Not only students but also well-educated professionals are falling into these traps. For instance, an executive from Oracle was scammed for 6 lakh rupees. People often don’t come forward to report these scams because they feel ashamed or fear social stigma. This gives scammers more freedom to cheat others.
The Emotional Manipulation
These scams are also known as pig butchering or romance scams. The scammers first make the victim emotionally comfortable by pretending to be friendly and understanding. They then manipulate the victim into believing that they are investing in a great opportunity. Once the victim puts in a big amount of money, the scammer disappears with the money.
Personal Experience with Scammers
Fake Accounts Everywhere
We at Goela School of Finance have faced many such scams. Fake accounts of our names are created on Instagram, Facebook, and even Telegram. These fake accounts deceive people by pretending to be us and offering fake services.
The Frustration
We have reported these fake accounts to platforms like Meta and Google, but it’s challenging to stop them. Many people have been scammed and even give us negative reviews, thinking we were involved. It’s a frustrating situation.
How Trading Scams Work
Creating Fake Accounts
First, scammers create fake accounts on social media platforms, pretending to be trusted individuals or companies in the finance industry. They then reach out to people who follow the real accounts and start building trust.
Fake Ads and Messages
Scammers also run fake ads using the names and faces of finance content creators. They text potential victims from these fake accounts, pretending to be legitimate and trustworthy.
WhatsApp Groups
They invite victims to join fake WhatsApp groups where they give trading tips. These tips are often manipulated to make the victim believe that the scammer knows what they are doing.
The Scammers’ Tactics
Dividing Groups
Scammers create multiple WhatsApp groups and give different tips to each group. For example, they might tell one group to buy a stock and another group to sell the same stock. When one group’s tip is correct, they split that group again and repeat the process. This way, some victims believe the scammer is always right.
Fake Apps and Payments
Scammers may ask victims to download a fake app and make payments through it. The money, instead of going to a legitimate account, goes to the scammer’s account. They use technical jargon to confuse and convince the victim that everything is legitimate.
Protecting Yourself from Trading Scams
Recognize the Red Flags
- Random Messages: Be cautious if you receive random messages from someone claiming to be a famous personality or a trusted organization.
- New Apps: If asked to download an app with few reviews, be wary.
- Too Good to Be True: Be suspicious of promises of quick, guaranteed returns.
- Cryptocurrency and Foreign Exchange: Scammers often use these areas to lure victims due to their complexity and less regulation.
- Guaranteed Returns: No legitimate investment guarantees high returns in a short time.
Stay Informed
Always verify the identity of the person or organization contacting you. Do not trust easily and double-check any investment opportunity. If it sounds too good to be true, it probably is.
Report Scams
If you ever fall victim to a scam, report it immediately to the authorities. This helps prevent others from falling into the same trap.
Conclusion
Trading scams in the stock market are dangerous and can happen to anyone. By staying informed and cautious, you can protect yourself and your loved ones from falling into these traps. Always remember to verify and double-check any investment opportunity before committing your money.
Stay safe and happy investing!
