Fake stock-tip groups and trading apps: how the scam works

A fake stock-tip group is a chat group that shows you big, easy profits from the stock market, then gets you to hand over your money through its own app. The profits on that app are not real. They are numbers the scammers typed in, and you can never take them out.

How it starts. You are added to a WhatsApp or Telegram group, or you click an ad for “free stock tips”. The group has an “expert”, an assistant, and dozens of members posting screenshots of huge gains. Most of those members are fake accounts run by the same people. The aim is to make you feel you are missing out.

Then the app. After a few “winning” tips, you are invited to trade through a special app or website, often with promises of IPO allotments or “institutional accounts”. You deposit by UPI or bank transfer to an account that looks like an ordinary person’s. Say you put in Rs 50,000 and the app soon shows Rs 1.5 lakh. It feels like proof. (Illustration of the pattern, not a real case.)

The exit that never opens. When you try to withdraw, there is always a new hurdle: a “tax”, a “service fee”, a minimum balance. Each payment unlocks nothing. In the end, the group goes quiet and the app stops loading. The money went straight to the scammers on day one.

Did you know? SEBI, the markets regulator, has repeatedly warned investors against unregistered people giving stock tips in social media groups and against unverified trading apps, and it does not allow registered entities to promise assured returns. Since October 2025, SEBI-registered brokers and mutual funds can collect money through special UPI IDs containing “@valid”, and its “SEBI Check” tool lets you confirm a UPI ID or bank account belongs to a registered entity. Source: SEBI, sebi.gov.in. Check the current rules there before you pay.

How to check before you pay. Do these checks yourself, outside the group.

Look up the broker or adviser on sebi.gov.in, not using a registration number pasted in the chat, which may be borrowed. Use only that broker’s official app from your phone’s app store. And remember the rule from risk and return: if a return is guaranteed and high, it is not investing, it is a trap. It is the same shape as a Ponzi scheme.

If you have already paid. Do not pay any “fee” to release your money, it will not come back that way. Call 1930 and file at cybercrime.gov.in quickly, and tell your bank. Our guide on how to report a UPI fraud has the steps. You can also report a suspicious message or call on the government’s Chakshu facility on the Sanchar Saathi portal.

The takeaway. Real investing never comes with guaranteed profits or with an app only a chat group knows about. Check the broker on SEBI’s site, pay only registered entities, and treat any “withdrawal fee” as the moment the scam shows itself.

More on staying safe: the task scam, how to spot a Ponzi scheme, and what a demat account is.