Have you ever seen a message on WhatsApp saying, “Turn ₹10,000 into ₹1 lakh in a month!” or received a call from an unknown number saying, “Buy this stock, get 100% returns”? If so, you may have narrowly escaped falling into the trap of a stock market scam! The number of people investing in the stock market in India is increasing, but so is the network of scammers. Last year, SEBI took action against 500+ such bogus advisors, but many are still eyeing your hard-earned money. Don’t worry! In this article, I will tell you about the five major warning signs of stock market scams and teach you how to keep your savings safe.
Why do scammers target Indian investors?
The excitement about the stock market is growing in India—millions of people are opening demat accounts, especially the youth and middle class. But scammers take advantage of this same enthusiasm. Why?
- Lack of trust: We often blindly trust “expert” advisors, especially if they say big things.
- Lust for quick money: When the Sensex crosses 80,000, the thought “I can also get rich” comes to mind, and scammers exploit this FOMO (Fear of Missing Out).
- Digital growth: Bogus tips spread easily on WhatsApp, Telegram, and Instagram, and new investors get caught up in them.
According to a SEBI report, thousands of investors lost crores of rupees in 2024 due to bogus advice. But if you are careful, you can avoid it.
Also Read: Savings Account Minimum Balance Rule
Warning sign #1 – Unrealistic promises
What is this?
If you see claims like “50% returns in a week!” or “This stock will definitely go up by Rs 100!” stop. No one can give 100% guarantees in the stock market. I remember my friend invested ₹25,000 on the advice of a similar Telegram group and lost everything in two days—the stock was just a pump-and-dump scheme!
How to spot it?
- If someone uses the words “sure” or “guaranteed”, be wary.
Check: Is the advisor on the official list of SEBI? You can verify this on the SEBI website (sebi.gov.in).
- Real advisors always tell you the risks, only the benefits. Facetune liked it.
What to do?
- Before following such advice, check the stock information on BSE or NSE.
- If you are not sure, talk to your investment advisor at your bank.
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Warning sign #2 – Fake trading apps
What is this?
- You may have heard of names like Zerodha or Upstox, but scammers create fake apps just like them. For example, an app called “Groww Pro” looks legitimate, but it steals your money. Last year, a person in Delhi lost ₹1 lakh because he deposited money on a bogus app.
How to identify it?
- Before downloading an app, check if it is official on the Google Play Store or Apple App Store.
- Check the app’s website URL—real websites start with HTTPS:// and have a trusted domain (e.g., zerodha.com).
- If the app pressures you to register quickly or asks for bank details, be wary.
What to do?
- Use only reputable brokers: Zerodha, Upstox, Angel One, etc.
- Check the app’s reviews and ratings. Be suspicious of reviews that are too good—they could be fake.
- If in doubt, contact the app’s customer care (real apps have a helpline).
Warning sign #3 – High-pressure sales
What is this?
- “Invest now, or you’ll miss out!” Have you ever received a call or message like this? Scammers don’t give you time to think. I once got a call like this, where a person said, “This IPO is a special offer for me.” I asked for time, and he hung up—later, I found out it was a scam!
How to spot it?
- Real advisors never pressure you into making an immediate decision.
- If you are being told about “Today’s offer,” it is most likely a scam.
- Check the caller’s number—often, they are unknown or foreign numbers.
What to do?
- Always say, “I need time to think.” A real advisor will approve of this.
- Check the offer details on Moneycontrol (moneycontrol.com) or BSE.
- Record the call—if it is a scam, you will have proof.
Warning sign #4 – Lack of transparency
What is this?
- Scammers do not provide their address, SEBI registration number, or company details. For example, I was once told to go to a website called “Elite Trading Academy”, but their “About Us” page was blank, and there was only a Gmail ID!
How to identify it?
- Check the “Contact Us” page on the website—it should have an address, phone number, and SEBI number.
- If there is only a WhatsApp number or Gmail ID, then that’s a red flag.
- Search the company name on Google and add the word “scam” (e.g., “Elite Trading scam”).
What to do?
- Check if the company has any complaints on the BSE or NSE complaint portal (bseindia.com/investorgrievance).
- Check the advisor’s registration on the SEBI website.
- If there is no information, don’t invest there.
Warning sign #5 – Social media hype
What is this?
- A penny stock (e.g., a ₹5 stock) suddenly becomes the “next Tata stock” in Telegram or WhatsApp groups. There are thousands of people in such groups, and they all praise the stock. But it is a “pump-and-dump” scam—after you buy the stock, the price drops, and you are stuck.
How do you know?
- If a stock is suddenly trending, but you don’t have any solid information about the company, be wary.
- Monitor the stock’s trading volume—a sudden increase could be a pump.
- Check the profiles of people in the group—they could be fake or new.
What to do?
- Check the stock’s information on BSE, NSE, or Moneycontrol—look at the company’s earnings, debt, and business model.
- Real stock news is available on trusted sources like the Economic Times (economictimes.indiatimes.com).
- Get out of such groups immediately—they are only there to trick you.
Real vs Fake Advisor
| Features | Real Advisor | Fake Advisor |
| SEBI Registered | (can be checked on SEBI website) | No or Fake Number |
| Contact Details | Address, Phone, Email | Only WhatsApp or Gmail |
| Does it tell you the risks? | Yes, it tells you the risks clearly | only talks about the benefits |
| Does it pressure you? | No, it gives you time | Yes, it tells you to invest immediately |
How to Check if a Research Analyst is Registered with SEBI
Real research analysts are registered with SEBI, but scammers use fake numbers or fake identities. For example, an advisor may say, “SEBI Registration #12345”, but it could be fake. A relative of mine met such an advisor who showed a fake certificate, and he lost ₹30,000!
How to identify?
- Ask for the advisor’s SEBI registration number—it starts with INH (for Research Analysts).
- Go to SEBI’s website (sebi.gov.in), go to “Intermediaries” > “Registered Intermediaries” > “Research Analysts” section, and check by entering the registration number.
- If the advisor refuses to provide the number or his name is not on the SEBI list, he is a scammer.
What to do?
- Consult only SEBI registered analysts—the list contains their names, addresses, and contact details.
- Check the advisor’s website for their registration number and SEBI logo.
- If in doubt, contact SEBI’s helpline (1800 22 75 75) or register a complaint on the SCORES portal (scores.gov.in).
What to do if you fall for a scam?
If you suspect a scam or have been scammed, don’t panic—there are a few things you can do:
Report to SEBI: File an online complaint on the SEBI SCORES portal (scores.gov.in). Attach your messages, call records, or payment proofs.
Report to the bank: If you have sent money, contact your bank immediately—sometimes the money can be recovered.
Report to the police: Go to the nearest police station or file a complaint on the cybercrime portal (cybercrime.gov.in).
Tell others: Tell X or your friends about your experience—this can help warn others.
If you need support, join online investor forums, such as ValuePickr (valuepickr.com), where you can get advice from experienced investors.
Conclusion
The stock market is a great way to build wealth, but scammers are after your hard-earned money. Today, you learned five warning signs: unrealistic promises, fake apps, high-pressure sales, lack of transparency, and hype on social media. Keep these things in mind, and always do your research—the BSE, NSE, and SEBI are your friends! A little time and caution can save you millions. Have you ever seen a scam? Share your story in the comments below—let’s warn each other!
FAQs for Stock Market Scam
Are WhatsApp stock tips a stock market scam in India?
Most WhatsApp or Telegram stock tips are scams, especially if they push penny stocks or promise quick profits. Verify the stock’s fundamentals on Moneycontrol or BSE before investing.
What is a stock market scam in India?
A stock market scam in India involves frauds like fake trading apps, WhatsApp tips, or unregistered advisors promising high returns to steal your money. Examples include pump-and-dump schemes or bogus IPO offers.
How can I spot a stock market scam in India?
Look for red flags like unrealistic promises (e.g., “100% returns”), fake apps mimicking Zerodha, or advisors without SEBI registration. Always verify details on BSE, NSE, or SEBI’s website.
How do I check if a research analyst is SEBI registered?
Visit sebi.gov.in, go to “Intermediaries” > “Registered Intermediaries” > “Research Analysts,” and enter their registration number (starts with INH). If not listed, they’re likely fake.
What should I do if I fall for a stock market scam in India?
File a complaint on SEBI’s SCORES portal (scores.gov.in), contact your bank to block payments, and report to the cybercrime portal (cybercrime.gov.in). Keep evidence like messages or receipts.