How fraudsters are scamming thousands of Indians using Facebook, WhatsApp

Cybersecurity researchers have flagged off a significant surge in fraudsters increasingly exploiting social media platforms like Facebook, WhatsApp, Telegram, and others to carry out investment scams in India, according to a recent report.

A surge in these scams has been witnessed since the beginning of 2024. CloudSEK, a threat intelligence firm, identified an alarming 81,000 fake investment groups on WhatsApp and over 29,000 malicious investment ads on Facebook. The report also underlined a concerning trend of impersonation, with 81,000 accounts on another platform posing as reputable financial entities to lend credibility to their fraudulent schemes.

The primary targets of these scams are reportedly India, Malaysia, the US, Thailand, and Vietnam. The report highlighted that India alone recorded over 1 lakh cases of investment scams in 2023, with losses amounting to Rs 1.2 billion in 4,599 cases during the first four months of 2024. In the same period, 62,687 complaints were lodged regarding investment scams, resulting in losses totaling Rs 2.22 billion.

The Modus Operandi

Criminal networks engage in systematic operations by purchasing data from brokers who scour underground forums for recently-hacked stock trading information and security testing specialists. These brokers contract hackers to breach specific stock trading websites and acquire their databases. Subsequently, the brokers sell this information to organized crime syndicates that orchestrate large-scale trading scams across multiple countries.

These criminal groups employ two types of personnel: handlers and actors. Handlers, who function as administrators of WhatsApp groups, manage the scams and report directly to the criminal leadership. Less experienced employees pose as successful investors, misleading victims with fabricated success stories.

Scammers initiate contact with potential victims through various social media platforms, using compromised data to send direct messages. Some actors also utilize platforms like Instagram, Twitter, LinkedIn, and others to entice victims into joining WhatsApp groups. Once inside these groups, victims are manipulated into believing they are dealing with legitimate investment firms. Scammers present false evidence of profits to deceive victims into investing, promising high returns and showcasing fake earnings to persuade further investments. Ultimately, they defraud victims and expel them from the WhatsApp group.