Retail investors in India are facing a sharp rise in online trading frauds, with scammers using artificial intelligence (AI), deepfakes, and fake investment apps to deceive even seasoned traders. Nearly ₹20,000 crore was lost to such frauds in 2024, marking one of the highest financial losses in recent years.
Fraudsters have evolved rapidly — moving from basic phishing schemes to AI-generated deepfake videos that impersonate reputed market experts. These videos circulate across social media platforms, luring users into downloading bogus investment apps or joining fraudulent advisory groups.
Tejas Khoday, CEO and co-founder of FYERS, said,
“The use of AI-generated content and deepfakes has transformed online fraud from crude phishing attempts to sophisticated, believable scams.”
He warned that scammers exploit human greed and urgency, stressing the need for digital vigilance and investor education to combat this growing threat.
Online trading scams typically begin on social media platforms, where criminals pose as financial influencers or experts to gain the trust of unsuspecting investors. They then promote fake trading apps, promising high, risk-free returns.
Initially, users may see illusory profits, encouraging them to invest larger sums. However, when they attempt withdrawals, they encounter hidden fees or locked accounts — and the scammers disappear, leaving behind heavy losses.
Fraudsters also use fake schemes offering guaranteed returns, which violate SEBI’s regulations and the stock exchange’s guidelines. The National Stock Exchange (NSE) repeatedly urges investors to verify brokers through its “Know/Locate Your Stockbroker” tool available on its website.
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Many investors fall prey to fraudulent trading apps and fake WhatsApp groups that promise easy profits. Experts caution that such apps often:
Promise unrealistic returns,
Lack of SEBI registration,
Request fund transfers to personal accounts, and
They are endorsed by unverified influencers.
Unregistered financial influencers often have no regulatory credentials and provide opinions without accountability, increasing the risk of misinformation.
Recently, WhatsApp scams have surged, with fraudsters creating groups such as “VIP861 HSBC GLOBAL SUMMIT,” impersonating institutions like HSBC Asset Management. Similarly, Kotak Securities warned users about fake IDs and international numbers misusing its name in 2024.
Paddy Raghavan, co-founder of Multipl, advised,
“The simplest solution is to always transact from within reliable apps and not by clicking links received through SMS or WhatsApp.”
Experts recommend a few crucial steps for investors to safeguard their money:
Verify SEBI registration of brokers and platforms before investing.
Download apps only from official stores such as Google Play or Apple App Store.
Avoid clicking on third-party links or advertisements.
Never transfer money to personal accounts claiming to be brokers.
Enable two-factor authentication for added protection.
Khoday further added that retail investors must treat trading credentials like bank passwords, avoiding reuse and insecure storage. Any suspicious activity should be reported immediately to cybercrime authorities or the 1930 helpline.
In response to rising fraud, trading platforms are deploying AI-based detection tools to identify anomalies, block unauthorised access, and alert users about ongoing scams. Some platforms now include “Report Fraud” features and in-app educational alerts to help investors stay informed.
Regulators are also stepping up. SEBI has intensified action against unregistered advisers, mandated disclosures for financial influencers, and strengthened KYC norms.
From October 1, SEBI made it mandatory for registered entities to use “@valid” UPI IDs (e.g., “.brk” for brokers), showing a green thumbs-up icon for verification. Investors can verify details through SEBI’s Saarthi app using the “Check Tool.”
Raghavan praised the initiative, saying,
“The Verified UPI ID from SEBI for brokers, MFs, and RIAs is an excellent step to build trust and ensure investors deal with legitimate systems.”
With scammers now using AI, deepfakes, and social media traps, financial frauds have entered a new era of sophistication. While technology enhances convenience, it also expands the threat landscape. As regulators strengthen frameworks and brokers tighten controls, investors must stay vigilant, sceptical, and informed to protect their wealth in the digital age.
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