Stock scammers operate freely on social media despite warnings

Online scammers are aggressively targeting victims on social media with ads promising unusually high and quick returns from stock investments, often appearing to be endorsed by well-known market analysts.

The fraudsters typically launch campaigns on Facebook, luring individuals into WhatsApp or Telegram groups, where they push them to invest through fraudulent apps. One such group has even announced the launch of a new app on September 20, despite repeated warnings from the Bangladesh Securities and Exchange Commission (BSEC) and the Dhaka Stock Exchange (DSE).

Failing to stop these activities, the BSEC has sought the assistance of the National Telecommunication Monitoring Centre (NTMC)-an intelligence agency under the Ministry of Home Affairs that was initially established under the Directorate General of Forces Intelligence (DGFI). The NTMC has the mandate to monitor and intercept electronic communication nationwide. It remains unclear, however, whether the NTMC has responded to the request, as scammers continue to operate freely.

A Financial Express investigation found that fraudsters are still actively pursuing victims daily. They exploit sensitive symbols, such as images of Nobel laureate Professor Muhammad Yunus, Chief Adviser of Bangladesh; photographs of prominent economist Dr. Zahid Hussain; and logos of reputed merchant banks and brokerages, such as BRAC EPL Stock Brokerage, to build credibility.

This scam model, though new in Bangladesh, has already caused massive losses abroad. According to an FBI report, billions of dollars were stolen from U.S. citizens in 2023 through the same method. In India, scammers looted 5 billion rupees before being caught in 2024. Similar schemes surfaced in the UK, Singapore, and Nigeria between 2022 and 2023.

Using AI, the fraudsters create thousands of attractive ads offering 300 to 500 per cent returns on stock investments. Victims are persuaded to open accounts, deposit funds, and trade based on the scammers' advice. Initially, they are allowed to make small withdrawals, supported by fake dashboards and "proof" videos showing fabricated profits.

Once victims gain trust, they are pressured to invest larger amounts with urgent offers like "only today," "bonus for top investors," or "VIP AI model." When investors attempt to withdraw bigger sums, they are told to pay additional "taxes," "verification fees," or "wallet upgrades." Ultimately, the scammers disappear after extracting as much money as possible, often converting it to crypto or moving it through bank transfers, cash pickups, and mobile agents.

The BSEC first detected such scams months ago, followed by a DSE press conference and official press releases warning investors. But enforcement remained ineffective. A BSEC official wishing not to be named told The FEthat the regulator "doesn't have the technology to prevent this."

In a recent letter to the NTMC, the BSEC's Market Intelligence Department said, "It has been observed that fraudsters are using Artificial Intelligence (AI) to send deceptive messages offering lucrative investment opportunities.

The letter added that one WhatsApp group had been detected and called for urgent measures to shut it down and identify its members.

However, The FE investigation revealed that scammers operate through numerous WhatsApp groups and fake accounts, making it impossible to curb the threat by targeting a single group. Experts stress that a coordinated, technology-driven effort is needed to effectively combat the problem.

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