From fake trading apps to Pyramid Schemes: NPCI cautions about these investment frauds

The National Payments Corporation of India (NPCI) emphasizes digital safety by educating individuals about investment frauds. It has advised investors to stay vigilant and well-informed to protect themselves from scams. It is important to conduct thorough research before investing and to avoid trusting unsolicited investment offers. NPCI has cautioned people about the following types of investment frauds.

Scammers build fraudulent investment apps or websites that look like actual brokers, fund houses, or exchanges. Users are initially tempted to deposit by displaying simulated gains on phony screens. They are unable to withdraw funds after making big investments.

Fraudsters target low-volume stocks and offer exclusive discounts to select customers. Investors are asked to move funds to personal accounts rather than exchanges or broking organizations, which may indicate fraudulent intent. This scam involves obtaining large sums of money, often in lakhs, under the premise of making wealth through share trading.

Scammers use employment offers to trick victims into sharing write-ups and documents. They request a little amount to ensure the transaction is legitimate. Victims are fooled into making further commission payments, which usually increase over time, until they realize the schemes are phony.

These scams promise high returns to investors but pay early investors with funds from newer ones, not actual profits. They collapse when new money dries up.