How deepfake videos and exploitative tactics are driving a surge in online share-tading frauds

According to the latest figures from the cybercrime police station of Pune city and Pimpri Chinchwad, as of mid-October, around 510 people have lost a staggering Rs 170 crore in online share-trading frauds. A large number of cases are still at the initial inquiry stage, with dozens of victims reporting to the police station every week.

“The scale of the frauds is mind-numbing. It is shocking to see people continuing to fall prey to the same scam despite continuous media reporting and advisories issued by authorities. Our probe suggests that these criminals continue to use newer tactics to manipulate gullible people,” said Inspector Swapnali Shinde from the cybercrime police station of Pune city.

Basic modus operandi remains the same

Hundreds of fake social media pages promising a prosperous future and enormous returns continue to act as the basic phishing net. Once viewers click the link on the page, they are directed to join WhatsApp or Telegram groups. These groups, comprising hundreds of potential victims and some cybercriminals posing as investors, provide constant updates on share-trading opportunities.

After a while, each potential target receives an individual message asking them to log on to certain share-trading applications designed by the cybercriminals. These applications are deceptively named to resemble international investment and wealth management firms, making them sound authentic. All communications with potential targets occur via text, and none of the fraudsters ever speak over voice or video calls. Victims are directed to invest through these apps and are given account numbers to send funds to. Often, free lectures and seminars are offered at the beginning.

As victims start sending money, the fake apps display exponentially high returns, luring them into sending more funds. The fraudulent apps feature user interfaces similar to legitimate trading platforms and even reflect ongoing market fluctuations. When victims seek to withdraw their earnings, fraudsters demand more money under the pretext of service charges and capital gains taxes. By the time victims realise they have been cheated, the fraudsters cease all communications. In cases registered thus far, victims have lost amounts ranging from a few lakhs to Rs 4 crore.

New chapters in the playbook

“We have observed a new tactic on hundreds of fake social media pages that are floating online. They previously used names or photos of stock-trading experts and business personalities. Now, they are employing AI-generated deepfake videos of share-trading trainers and industry leaders,” said an officer.

Multiple cases are being reported from across India in which deepfake videos of industrialists like Infosys co-founder N R Narayana Murthy and Reliance Industries chairman Mukesh Ambani have been used to cheat investors. Cyber investigators in Pune noted that they have observed many cases where pages featuring deepfake videos of stock-trading experts like Rachana Ranade have been utilised. In a video released from her verified YouTube channel, Ranade, a chartered accountant, recently appealed to the public not to fall prey to such deepfake videos.

“In a new and highly manipulative tactic, cybercriminals are planning their moves to prey on the compulsive trading habits of people. These criminals flood the message inboxes of victims with fake success stories and share-trading suggestions presented as ‘expert tips’. We have reasons to believe that AI-based tools are used to make the user experience of these apps more addictive—colour schemes, alerts, constant updates, bonus trading amounts, catchy words and phrases and reminders for trading are some examples,” said a cyber investigator in Pune.

He added, “These are the same tools employed by online gambling platforms. Individuals interested in share trading, or those searching for share-trading options, are inundated with these social media advertisements. Many of them serve as gateways to these frauds and are increasingly difficult to distinguish from genuine ones,” the officer remarked.

How to keep cons at bay

“The same set of cyber hygiene etiquette can be useful here and must be applied rigorously. One can identify deepfakes by checking for audio-visual mismatches, inconsistencies in facial expressions, background issues and lip-sync problems. One of the best ways to verify information is to trust only posts from verified and official handles,” the officer added.

The Securities and Exchange Board of India has issued multiple advisories regarding fraudulent online apps. “Fraudsters are enticing victims through online trading courses, seminars, and mentorship programs in the stock market, leveraging social media platforms like WhatsApp or Telegram, as well as live broadcasts. Posing as employees or affiliates of SEBI-registered Foreign Portfolio Investors, they coax individuals into downloading applications that purportedly allow them to purchase shares, subscribe to IPOs, and enjoy ‘Institutional account benefits’—all without the need for an official trading or Demat account. These operations often use mobile numbers registered under false names to orchestrate their schemes,” the market regulator has said.

Investigations in the past have revealed that the multi-layered rackets behind these scams are masterminded by international cybercriminals. The lower tiers, consisting of rented account holders and middlemen, operate from India, funnelling money to the masterminds based in Middle Eastern and Southeast Asian countries via cryptocurrency routes.