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Investment scams with the rise of social media platforms: Report

The landscape of investment scams in India has seen a significant surge, driven by the widespread use of social media messaging platforms like WhatsApp and Telegram. Fraudsters are increasingly impersonating reputed financial professionals, fund managers, and influencers to lure unsuspecting investors into fake investment groups promising quick returns.

A recent threat intelligence report by CloudSEK has shed light on the modus operandi and tactics employed in these fraudulent activities targeting India. The report reveals a substantial volume of malicious content circulating on these platforms, with over 1 lakh investment scams reported in 2023 alone. From January to April 2024, there were 20,043 trading scams resulting in a loss of Rs 14.2 billion, alongside 4,599 digital fraud cases causing losses of Rs 1.2 billion.

The report uncovers how organized criminals purchase data from data brokers, who scour underground forums for newly hacked stock trading data and pen testers. These brokers contact hackers, paying them to breach specific stock trading sites and obtain their databases. The brokers then sell this data to organized crime groups running large-scale trading scams across multiple countries.

These crime groups employ handlers and actors to execute the scams. Handlers, acting as WhatsApp group admins, maintain full control and report back to the criminals. Less skilled employees pose as successful investors, misleading victims with fabricated success stories.

One notable tactic is the use of Indian phone numbers with WhatsApp Business accounts to appear legitimate. These numbers are often acquired through fraudulent means using fraudulently obtained SIM cards. The report highlights the need for vigilance in recognizing these deceptive practices.

The primary types of trading scams identified are crypto and stock scams. In crypto scams, threat actors persuade victims to invest money in cryptocurrency through fake investment websites. In stock trading scams, victims are encouraged to invest in stocks with promises of high returns. The most targeted countries include India, Malaysia, the USA, Thailand, and Vietnam.

There has been a notable surge in the sale of Indian stock trader data on underground forums. Numerous threat actors are actively buying and selling this data, with a recent increase in targeted attacks on Indian stock exchange websites.

Scammers use targeted advertisements on popular social media platforms like Facebook, Instagram, and LinkedIn to attract potential victims. These ads often promote “get rich quick” schemes, exclusive investment opportunities, or free stock tips.

The report underscores the importance of vigilance in detecting and preventing these sophisticated scams.

PR Newswire

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