Investing, Social Media & Scams!

    Anecdote- We recently we met a client and pitched the 1 Crore plan. He was quite happy and agreed to start the investment journey with us. A few days later he sent me a insta-story about how somebody can make 15 crores and asked me – Why I pitched “Only 1 Crore” when we can make 15 crores!

We have always been wary about YouTube shorts and Insta stories which give a false notion it is very easy to make money in stock markets and become super duper rich. Our suspicion is that the only motive of these social media posts is to entice people and dupe them of their hard-earned money. Confirming our suspicion, we recently came across scam which used should social media to reach a lot of well-educated, literate people and cheated them. 

Here's what happened…

Madhav had already invested Rs 30 lakh through an app called KKR MF, which he had been led to believe was managed by the global financial services group. Mind you, Madhav is not a simpleton, but an intelligent, accomplished professional who was looking to make big stock-market gains but was scammed through apps. He was promised access to institutional accounts of foreign portfolio investors (FPIs)—for buying shares at discounted prices and getting allotment in promising initial public offers (IPOs). He was baited and groomed through social-media channels, and his money was funneled through apps, which go by different names such as Provex and Bainlit

Madhav came to be invited to a WhatsApp group after clicking on an Instagram post. He had joined the group out of curiosity and to see if he could get ideas for multi-baggers. Madhav beleived that money in the market is made from a few good stocks. For example, His Rs 40 lakh investment in a stock went to zero. But his investments of a few lakhs in two or three stocks have shot up to nearly Rs 2 crore. So he was always looking for the next multibagger idea. In the WhatsApp group daily stock ideas were suggested and most of the time these stocks went up 2% to 3% on the same day so Madhav was all always hooked. At times when the stock idea did not perform, there used be a leader in the WhatsApp group who used to keep sessions after the market hours to explain with charts, research reports and everything else that looked very knowledgeable.

Then the group also had members who were very vocal about this leader and how knowledgeable and very helping he was and they always appreciated that he was giving away his knowledge for free so that others can make wealth out of it. All this led Madhav to believe that this is a very good group and the person is very knowledgeable and he should trust this person. Rather than decided to take a loan of 20,00,000 and invested through this group. He was given a link to the app with fancy names like Provex and Bainlit. Assuming these are international apps Madhav blindly followed the steps laid out and transferred the money to the app.

Initially the app reflected his investments, and he could see that whatever he had invested was going up handsomely and in a very short span it reached 50 lac rupees. However, when it came  time to cash out profits, Madhav hit roadblocks. He was pressured to invest more money or share his profits, and threatened if he resisted. This pressure cooker situation eventually lead Madhav to realize he was conned and he can't access his supposed profits without jumping through more hoops.

It's a devastating blow for victims like Madhav who find themselves in deep financial trouble after falling for the scam. The aftermath leaves them with heavy losses and shattered trust in financial systems. This cautionary tale serves as a stark reminder to stay vigilant and skeptical of too-good-to-be-true investment schemes.

Next time, When somebody sells a dream scheme on Social media, better beware! 

For any financial Planning queries, Please contact Droplet Wealth at invest@dropletwealth.com.