ScamGram: Telegram Is Becoming A Tool For The Wicked In The Stock Market

Over 10 days, Dinesh transferred Rs 2 lakh to the operator of the Telegram group in installments, using the Unified Payments Interface. This money was Dinesh's life savings, which he intended to multiply.

A few days later, he sought to ask what happened to his investments, but to his surprise he was blocked by these people. "I lost two years of my mehnat ka paisa (hard-earned money) on this fraudulent share trading on Telegram app," he said.

Dinesh has so far registered a complaint with the capital markets regulator, but it has been of little help.

This story is one of many, where retail investors are being lured in by fly-by-night operators over the Telegram app. The modus operandi is simple: promise high returns, take money and then vanish. This is also a fallout of the retail gold rush seen in the stock markets in recent years.

There are a handful of ways through which unsuspecting users are reeled into the scam. Some of these are listed below.

Catfishing

This is a process where users are lulled into a false sense of security, as scamsters use images and names of popular stock market influencers.

In Dinesh's case, that name was Mohit Agarwal.

"They use fake names and numbers, and there are multiple Telegram accounts opened under the name of Intraday Match," said Mohit Agarwal, the founder of Intraday Match.

Agarwal started as a stock market analyst on Telegram and soon shot to fame. He eventually got Intraday Match registered with the capital markets regulator as a legitimate advisor. However, Telegram is now full of fake Intraday Match groups, with scamsters posing as Agarwal.

To make sure the transactions go through, the scamsters rent bank accounts from poor people in rural areas. Typically, scamsters pay between Rs 5,000-10,000 for such usage. This ensures that while they have access to the banking system, their identity remains a secret and they remain largely untraceable.

In one such case, Agarwal's identity was misused to lure people. The scamster used his name, GST number, and registration number to create a fake invoice. This was used to deceive a victim out of Rs 18 lakh.

The Lottery

Another usual technique is to promise people that their money would be doubled. This attracts a long list of desperate victims who are looking for a short-term fix for their financial problems.

In this sort of scam, investors are breadcrumbed with small profits. Soon the scamster ends up stealing a large chunk of money and leaving the victims hanging.

The victims typically invest small amounts of money to the tune of Rs 3,000-5,000 initially. The victims do see this initial investment double in the short term. Eventually, the scamsters demand larger sums before vanishing with the money, Agarwal explained.

Bait And Switch

A popular way to scam unsuspecting users is to offer educational courses in the beginning.

Rahul Shahdeo, founder of Kabiraj Dairy Farm Pvt., in Ranchi got a call offering one-on-one services and expert classes on trading and investing. The classes were detailed and even provided high quality study material and in-depth research, Shahdeo told NDTV Profit.

Later, the scamsters sent Shahdeo a link, advising him to download Bbulls, a mobile application. Shahdeo was careful and started investing on the app with a Rs 50,000 investment. The initial experience was fine, but soon, the scamsters asked him to start dealing in bulk trades. Shahdeo agreed to invest up to Rs 51 lakh in such trades, which quickly rose to earnings of Rs 1 crore on the app.

When Shahdeo sought to withdraw his returns, the scamsters vanished.

Resolutions Hard To Come By

Agarwal said that he has been contacted by multiple investors who have been scammed in his company's name.

"The company receives around 10 calls everyday from people who have been scammed using our name, usually for smaller amounts ranging from Rs 3,000 to 5,000," Agarwal said. "Around 50 fake channels depicting the business are still active."

For investors like Dinesh, complaints to cyber crime units have yielded no positive responses, and numerous emails to SEBI have gone unanswered. Previously, a third-party agency would intervene to ban fraudulent channels upon receiving complaints, but now, they demand court orders to take any action, said Agarwal. This legal requirement creates a time-consuming process that often allows scammers to vanish before they can be stopped.

Investors like Shahdeo, who acted immediately after the scam, have tasted some success. After his complaint, the Mumbai Police's cybersecurity team quickly traced the money and froze Rs 24 lakh, he said.

Cyber crime officer SI Mangesh Bhor explained that banks do cooperate in such cases, if alerted on time. If the money is moved electronically, banks try to freeze funds in the receiver's account. But if the money is withdrawn before that, further investigation is necessitated.

The Indian government should introduce new regulations against these scams through social media apps, said Nitin Kedia, founder of Kedia Fincorp, a trading advisory firm.

What started with scamsters trapping victims using text messages, soon evolved into social media platforms and chatting apps like Telegram.

“They created channels on Telegram, attracting 5-10 lakh people, and started giving stock market tips, especially during the pandemic,” said Kedia.

While SEBI acted against the text message scam, no such action has been taken against telegram operators, he added.

Vivek Iyer, partner and financial services leader at Grant Thornton Bharat, believes that trying to put curbs on chatting apps is not the solution.

"When you share screenshots of your PAN and Aadhaar over chat, it's not the security of the app being compromised. ...An individual pretending to be an advisor is not the app's problem," he said.

Who're You Going To Call?

For those defrauded in these scams, there is still some hope.

On Aug. 3, Mumbai’s cyber crime branch announced that the 1930 Cyber Helpline has saved Rs 100 crore for citizens defrauded by cybercrime in the last seven months.

Since its inception on May 17, 2022, the helpline, manned by three officers and 50 enforcers, has registered 35,918 complaints as of January 2024. Common scams include share trading, courier, digital arrest, and online task scams.

Avoid downloading share trading apps via APK files and always verify the website's authenticity, warned Bhor. "Be cautious with social media ads, as real NSE/BSE-registered share trading companies will never ask for payments to individual bank accounts," he advises prospective investors.