PSX issues alert on rising fraudulent investment schemes through social media

The Pakistan Stock Exchange Limited (PSX) has issued an alert to investors regarding the surge in fraudulent activities promoted through social media and WhatsApp groups under the guise of investment advice and training courses. 

The PSX said that the scammers may misuse the name of registered professionals or claim to be affiliated with a legitimate company to lure the investing public to participate in unauthorized investment schemes.

These fraudulent groups and media pages demand fees from individuals to grant them membership, provide exclusive access to insider tips, and provide training on investments. 

The scam operations may include requests to transfer money to a private or third-party account, promises of exorbitant profits, claims of no or minimal risk, and safe returns, which are baseless and fraudulent.

To avoid becoming a victim of such types of scams, the investing public is warned to be wary and alert of unsolicited social media invitations received through apps such as WhatsApp or social media platforms including fraudulent platforms such as WhatsApp, the PSX said in its alert. 

To safeguard against falling victim to these schemes, PSX has advised investors to verify the legitimacy of professionals and investment opportunities through official channels such as the PSX and SECP websites. 

Additionally, the exchange urged investors to avoid sharing personal or financial information with unknown or unverified sources.

To stay safe from possible scams, the following precautions must be taken:

1. Background check and verification: Make sure that you are dealing with licensed professionals and entities by conducting research from PSX and SECP websites. Do not blindly trust advice, investment tips, or any information obtained from unaffiliated professionals or social media platforms.
2. Do not share information: Do not share personal or financial information such as username, password, or bank account information with unknown persons or unverified sources. Be extra cautious if you are asked to share information to a personal email address or mobile number, or move money to the account of a third party.
3. Be alert to red flags of fraud: Be particularly wary if someone promises guaranteed fixed returns or exorbitant profits with little or no risk. If someone advises an investment that is not part of an authorized scheme, neither being offered nor regulated by PSX, or anyone asking you to transfer money or invest quickly, it can be an indicator of fraudulent activity.
4. Do not fall for unsolicited investment advice: Be cautious when urgently responding/reacting to any unsolicited messages or engaging in activities offering unsolicited advice on investments without confirming their authenticity. Engaging with unverified entities/groups may lead to significant financial losses.

Key red flags include unsolicited messages, guarantees of fixed or exaggerated returns, and pressure to invest quickly. 

PSX also advised caution with unfamiliar URLs or email addresses that mimic legitimate firms, as scammers often use these tactics to deceive potential victims.

The stock exchange stressed the importance of conducting thorough research before making any investments and to consult reliable sources for financial advice. Investors are encouraged to report any suspicious activities to PSX through official helplines or email.