Investing in mutual funds and stocks has become more accessible in India, but scammers have also found new ways to exploit this growing participation and dupe investors online with promises of quick and guaranteed returns.
WhatsApp and Telegram groups are often used to build a false sense of trust through fake profit screenshots and stock tips, before members are directed to fraudulent trading apps that can drain their savings.
According to data from Ministry of Finance, as many as 235 lakh of demat accounts were added during FY 2026 (till December 2025), pushing the total count beyond 21.6 crore. The mutual fund industry also continued to expand, with 5.9 crore unique investors recorded at the same period, of which 3.5 crore (as of November 2025) were from non-tier-I and tier-II cities.
Sebi issues advisory against fake investment tips
The rising scams prompted the Securities and Exchange Board of India (Sebi) to issue an advisory warning investors against WhatsApp stock-tip groups that use fraudulent tactics to create a false impression of credibility and lure investors.
In a statement on Thursday, the market regulator said that certain unregistered persons were offering stock recommendations to investors through invitation-only WhatsApp groups under the guise of free investor education. These operators often use overseas numbers posing as market experts.
“To make these calls look credible, certain members, acting in concert with the operators, post false claims of profit and praise the ‘expert’. This practice, known as astroturfing, creates a false impression of genuine support and induces unsuspecting investors to act on the call,” Sebi said.
Can you recover money lost to a fake app or tip?
If you already fell for a fake trading app or guaranteed-return WhatsApp group and lost money, recovery may be possible if you act quickly.
According to a blog post by Tata Mutual Fund, a fraud victim should immediately contact their bank or payment provider, call the national cybercrime helpline at 1930, and lodge a complaint on the National Cyber Crime Reporting Portal.
Prompt reporting can improve the chances of blocking or tracing the funds before they are withdrawn or transferred further, although recovery is not guaranteed.
However, you cannot force a refund or sue a broker or company just because a stock recommendation or tip went bad. This is why consulting a Sebi-registered investment advisor can be a prudent approach for making investments.
In January last year, Sebi introduced restrictions on how finfluencers can provide stock-related content under the guise of investor education on social media. Stock prices used for educational purposes must be at least three months old, and live stock prices cannot be used. Registered entities are also prohibited from paying influencers for any direct or indirect association’.
How to avoid fake trading app scams in India
Here are some more tips, as per the blog post, that may help you avoid fake apps and WhatsApp investment scams in India:
— Treat ‘guaranteed return’ claims as a warning sign: Markets are volatile and mostly unpredictable in nature, so anyone promising you guaranteed returns or saying that they could double or triple your investment money in short time must be treated as a potential scam. Remember that as per Sebi guidelines, legitimate investment platforms and apps cannot promise assured returns.
— Stay away from investment advice shared on WhatsApp groups: Scammers often use WhatsApp to pose as market experts and run guaranteed return scams in India. Be wary of the links shared on WhatsApp groups as these links can be phishing scams that can empty your bank account.
— Always verify credentials Don’t take investment advice from individuals or platforms without verifying their registration status as only Sebi-registered investment advisers can offer investment advice to clients.
— Check if the app is legitimate: Before you start investing through a trading or investment app, check if they have Sebi’s ‘verified’ badge on your phone’s app store. You can also go to the investor support page on Sebi’s website and check the list of Sebi-authorised intermediary apps.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
About the Author
Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience.
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While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments.
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She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai. During her time there, she received rigorous training in tracking financial data, interpreting corporate filings, and reporting on business developments. She has pursued her graduation from St. Joseph’s University, Bengaluru in a multi-disciplinary course. Her majors included Journalism, International Relations, peace and conflict studies.
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Eshita has previously worked in digital marketing, which enables her to write SEO friendly copies that are clear and engaging.
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Her primary interest lies in breaking down complex subjects and writing clear, accessible copies that inform readers. She aims to bridge the gap between technical financial language and everyday understanding.
Outside the newsroom, Eshita enjoys reading non-fiction, and exploring new places, constantly seeking fresh perspectives and stories beyond headlines.