In a shocking case of investment fraud, dozens of investors from the United Arab Emirates (UAE), many of them Indian expats, have lost millions of dirhams after Gulf First Commercial Brokers abruptly shut down its offices in Dubai's Business Bay. According to a
report from Khaleej Times, the firm, linked to the unregulated trading platform Sigma-One Capital, vanished overnight, leaving behind empty rooms, disconnected phone lines and devastated victims. The entire 'investment' operation followed a calculated script of cold calls, sometimes in Indian languages, false promises of high returns and mounting pressure tactics that financially ruined scores of individuals.
Surprised? Don't be. This is happening not just in the UAE but everywhere, including our home grounds. A simple search on X (erstwhile Twitter) reveals how deep investment scams are running and lakhs of people are losing their hard-earned money. What is more worrisome is that many ‘investment’ (read: bumper returns) crazy people are worsening their financial situation by borrowing from multiple sources, including personal loans and credit cards, to name a few, ultimately spiralling into a debt trap. This pattern of over-borrowing for investing in a dubious financial product is compounding their difficulties rather than resolving them.
In a digitally-driven India, where over 500mn (million) citizens actively use social media platforms, the intersection of finance and cyberspace has become a breeding ground for sophisticated investment frauds.
With platforms like WhatsApp, Telegram, Instagram, Facebook, and YouTube becoming common sources of (fake) financial advice and overhyped opportunities, cybercriminals have found fertile ground to orchestrate scams targeting individuals across age groups and income levels. These scams not only drain bank accounts but also erode trust in digital ecosystems.
The scale and audacity of investment-related cyber frauds in India have escalated sharply in recent years. According to the Indian cybercrime coordination centre (I4C), there was a notable surge in complaints related to online investment frauds in 2024, many of them originating from deceptive campaigns on social media. The victims—ranging from tech-savvy millennials to retired pensioners—often fall for schemes that promise high returns with minimal risks.
Cybercriminals prey on emotions and aspirations, luring people with manipulated testimonials, fake success stories, and deepfake videos of celebrities seemingly endorsing investment platforms. They capitalise on the trust users place in familiar logos and faces, often cloning reputed financial services websites or running ads with the stolen credentials of legitimate companies.
Let us look at common types of social media investment scams and how they work in luring and duping users.
1. Fake Stock Market Advisory Groups on Telegram and WhatsApp
Cybercriminals set up groups that appear to offer insider tips or stock market predictions. These groups often start with somewhat accurate (not 100%) advice to build credibility, before coaxing users into paying for premium subscriptions or investing in sham opportunities. These 'quick bumper return' offers exist only till you invest money and then become untraceable or simply vanish into thin air.
2. Ponzi Schemes Disguised as Investment Clubs
These scams promise exponential returns if victims recruit more members. Often promoted via Instagram, Facebook groups or Telegram channels, these schemes collapse once the chain of new investors dries up.
3. Fake Cryptocurrency Investments
The rise of digital currencies has given birth to countless fake initial coin offerings (ICOs) and crypto trading platforms. Scammers use YouTube videos and Instagram influencers to promote fraudulent coins, draining lakhs from hopeful investors.
4. Deepfake Endorsements
Using AI-generated videos and manipulated audio, fraudsters produce clips of celebrities or financial experts seemingly recommending a bogus investment app or scheme. In 2023,
Infosys founder Narayana Murthy's two new deepfake videos, which were being shared on social media, purportedly promoted a so-called investing platform “Quantum AI”, claiming that the user of this new tech would be able to earn US$3,000 (around Rs2.5 lakh) on the first working day.
5. Impersonation of SEBI-registered Advisers
Fraudsters copy the identities of genuine investment advisers (IAs) registered with the Securities and Exchange Board of India (SEBI). These fraudsters create and operate fake social media pages and LinkedIn profiles to lend legitimacy to their scam. In one such case,
SEBI penalised Trade Show Advisory and its owner after finding that they were repeatedly using terms like ‘investment adviser' and 'stock market adviser', without the mandatory SEBI certification.
In Mumbai, a young software engineer lost over Rs8.5 lakh after being invited to a 'premium investors group' on Telegram. The group, allegedly managed by a financial expert, initially offered small but accurate stock tips. Over the weeks, he was convinced to invest larger sums into a ‘private equity opportunity’ that turned out to be fictitious.
In Delhi, a fake influencer account on Instagram offering 'guaranteed Bitcoin profits' managed to cheat over 1,000 followers by using photoshopped screenshots of bank transfers and manipulated testimonials.
These are just two examples of investment-related fraud. But the main question is: Why and how these scams continue to proliferate despite regular warnings and advisories from regulators, government authorities, law enforcement agencies (LEAs) and security experts. One of the main reasons is the psychological tactics used by cybercriminals.
Here are some of the tactics used by fraudsters...
- Greed and fear of missing out (FOMO): 'Limited time offers', ‘free trading courses’ and 'secret investment hacks' make users act quickly without verification.
- Trust in peer validation: Seeing friends or influencers engage with a post makes it seem credible.
- Lack of financial literacy: Many people (still) cannot distinguish between regulated financial advice and deceptive marketing. What is more shocking is educated people, especially the highly educated ones, assume they completely understand and know everything, while the less educated think they don’t need to learn anything about financial literacy.
- Technological deception: Deepfakes and cloned websites make it harder to identify a scam.
Having said that, let us see how common people can stay safe from any and every investment fraud.
1. Verify before you trust
- Never invest based solely on a message, post, or video on social media.
- Check if the person or company offering investment advice or investment opportunity is registered with SEBI from this link https://www.sebi.gov.in/intermediaries.html.
- Use official apps and websites. Avoid downloading apps shared via links on WhatsApp or Telegram.
2. Be wary of ‘guaranteed returns’
No legitimate investment can promise guaranteed returns, especially not within short timeframes. Be suspicious of anyone making such claims.
3. Use official sources
Cross-check investment opportunities on platforms like the National Stock Exchange (NSE), BSE or the customer awareness site of Reserve Bank of India (RBI). Follow genuine financial news portals instead of relying on viral posts.
4. Don’t share personal financial information
Do not share permanent account number (PAN), Aadhaar, one-time passcodes (OTPs), or banking credentials with anyone on social media. Remember, even screenshots of transactions can be misused.
5. Watch out for deepfakes and cloned websites
Learn to identify inconsistencies in speech, lighting, or expressions in videos—common giveaways in deepfakes. Always inspect the URL of websites for spelling errors or extra characters. And do not forget to use websites with only 'https' and not just 'http' for every financial transaction.
6. Report and block
Report suspicious accounts or ads to platforms like Facebook, Instagram, and YouTube. Use the cybercrime reporting portal (
https://cybercrime.gov.in) or call the helpline 1930 to lodge a complaint.
7. Financial literacy is key
Attend workshops, follow certified financial educators, read books on basic financial planning or keep reading Moneylife. Remember, awareness is the first line of defence against cyber fraud.
8. Stay away from investments that you don't understand
At Moneylife, we often tell readers to never invest in any financial product that they do not understand. For example, if you do not know how the foreign currency (forex) market actually works or how cryptocurrency values are derived, it is better to stay away from them. Just for information, forex trading is a volume game — large amounts of capital are moved with thin margins, making scale critical. Cryptocurrencies are digital assets not controlled or regulated by a central authority. Lack of regulation and thin liquidity in smaller tokens often make some cryptos vulnerable to pump-and-dump schemes.
However, social media platforms and LEAs need to speed up to successfully block and detect investment scams. Social media platforms need to improve artificial intelligence (AI) moderation to identify fake investment posts, especially those using deepfakes. LEAs, on the other hand, need better cyber forensic capabilities to track down anonymous perpetrators operating from foreign shores.
The government’s cyber swachhta kendra and the Indian computer emergency response team (CERT-IN) have ramped up efforts to educate users, but the sheer volume of scams makes prevention a continuous challenge.
As India’s digital economy continues to thrive, so do the risks associated with its widespread adoption. Investment scams on social media are not merely financial crimes—they are violations of trust, privacy, and digital safety. By fostering awareness, enhancing personal caution, and demanding accountability from tech platforms and regulators, you can help create a safer online financial landscape.
In the age of digital finance, let scepticism be your shield and education your sword. If an investment opportunity looks too good to be true on social media, it probably is.
Stay Alert, Stay Safe!
