Know The Share Market Scammers and Prevention Tips

1. Chain Marketing Scammers- Let’s see with an example-
Scammers take 1000 emails, divides them into two parts(500-up /500-down), and sends 500 people that Reliance stock will go up and remaining 500 people saying Reliance stock will go down. After a month, if Reliance stock goes up, he will take the 500 emails he sent in favor of stock up; if went down, pick the 500mails sent for down, divide them again in 250-250 batch, and repeat the same process again (250 up – 250 down). Again, pick the 250 up or down depending on the stock going up or down and divide it in 125up-125down batch and repeat the process.
Now, at last, send the remaining 125 people the link of your Stock prediction advisory service saying we predicted the last 3 months correct stocks for you if you want more advisory then subscribe to our pack (generally >15K-20K).
Here the user will see, scammer predicted 3 months correct prediction sequentially and will buy the pack, but in the background, the scammer was just random guessing.

Tip- Always first search yourself about the company, ask others for review. Never trust someone blindly.

2. Penny Stock scam- People sometimes(mostly newbies) buy cheaper stocks like 1 share for 1rs thinking if the share jumps to 2rs pr share there money will get doubled(100% return).
These penny stocks companies are very low liquidity companies. Sudden purchase in their stocks shows huge fluctuations. Sometimes when the owner wants to dump stocks, he will buy stocks first from the market, and the stock price will start going high, and investors will start investing, seeing huge 40-50% profit returns. Once the price goes high enough, the owner will dump all the stocks from a third party, and stocks will fall. In the end, these uneducated/newbie investors will lose money.

Tip- If the share is dropped to a very low price means the company is facing some problems and is unable to generate profits else there are various big whales in the stock market who are ready to buy value stocks at a lower price. Stay away from those stocks, invest in quality, fundamentally strong companies those who can show some returns and willing to stay for longer.

3. Profit guaranteed scammers- Nowadays, you will see many social media ads saying that Guaranteed returns, take our advice and invest, get 40-50% ROI, and will show proof of balance sheet that they earned huge profits.
Tip- First of all, no one(NOO ONE) can guarantee returns in the stock market. Warren Buffet himself will never say invest in this and get guaranteed return. These scammers are here to loot your money by showing edited balance sheets or only profit balance sheets(hiding the loss). Don’t trust someone for guaranteed profits.

Tips to check before start investing-
1. Always check/ask the person/advisory – Are you registered with SEBI? if they are so-called expert, why not get registered with SEBI.
→ SEBI registered person/advisory is generally audited/verified, and mostly they can’t run away after scamming.
→ Check the SEBI license if the person/advisory showing the license is generated using the same name they are showing to you/website. Sometimes they show that they are SEBI registered, but the license belongs to someone else and is illegally used to scam people.

2. If any trader/investor/broker asks you to deposit money in an account and asks id-password saying they will do trading/investing themself and will earn you money. Never give it up else; you will lose what you already had. This is totally illegal.

3. If anyone asks you to send some money to them and in return, they will earn and give you extra money every month. Please run away
4. If someone forces you to open an account at a specific broker, only he will give you tips/advice. Please don’t do it. He may have tied up with that broker and will make you do lots of transactions in return, They will eat up a lot of brokerage commission.

At last, the most crucial point, “Only invest the money you can afford to lose”, the share market is a risky game never invest above your capacity, that you may go broke if you lose it all.