You might come across investment schemes offering unusually high returns through social media platforms, messages or emails. Such schemes appear lucrative at first glance. However, be wary of such investment ideas, schemes and offers, as they can lead to financial fraud.
The State Bank of India (SBI) has strongly advised investors to avoid fraudulent investment schemes that promise returns of up to 30% per month.
In a post on X on 12 October, the public sector lender highlighted the risks of such offers as part of its ‘National Month Special Campaign 6.0’. The bank urged people to carefully verify investment opportunities and remain alert to online financial fraud.
SBI posted: “National Cyber Security Month Special Campaign 6.0 “Earn 30% monthly!” – If it sounds too good to be true, it definitely is! Fraudsters lure victims with fake investment schemes and steal hard-earned money. Don’t fall for quick-rich traps. Verify before investing. Choose trusted financial channels Protect your savings. Stay alert, stay safe! @DFS_India @DARPG_GoI @Cyberdost [sic].”
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How do these scams work?
In the tweet, SBI discussed how fraudsters lure innocent victims with false promises of quick profits, eventually stealing their hard-earned funds. These schemes can involve misleading advertisements, unsolicited messages, fake websites and fake links or persuasive claims to convince individuals to transfer funds.
If you come across lucrative promises of 30% returns, it is wise not to take them seriously. It is prudent to be wary of extraordinary claims of profits, particularly when an individual or platform making them is unknown.
Four common red flags to watch
- Offers of guaranteed returns.
- Pressure to invest quickly and transfer via UPI/Crypto/Gift cards, etc
- Such schemes are pushed through unknown influencers and fake testimonials
- Request for personal/financial information via insecure links
What should you do to protect yourself from such scams?
- Rely only on stock investment applications and websites.
- Follow investment advice from SEBI-licensed advisors only.
- Visit the official websites of the respective banks to obtain information.
- Do not click on any unknown links and do not share personal/ financial information.
Investors should carefully verify the regulatory credentials of an investment provider. The scheme documentation and details of SEBI and RBI regulations should be checked.
Other common tricks to cheat unsuspecting victims include unsolicited investment offers, pressure to invest funds immediately, and requests to transfer funds to personal accounts, all of which deserve particular scrutiny.
To stay safe in such a scenario, always rely on the official websites of reputable platforms and verified communication channels rather than links, messages or contacts shared by unknown individuals.