Am I the only one losing money in the investors' chat group?

Recently, fraudulent investors' chat groups are on the rise again. Attracted by one-stop services that offers live market analysis, regular benefits disbursements and exclusive members-only advisory, many investors have fallen prey to such chat groups.

Are all the other 39 members of the chat group scammers? How are investors' chat groups so successful in making people fall for their traps? Why is it dangerous to follow the the advices of these "investment gurus"?

The "Chat Group Show"

Groups acting in cohort using different accounts

Fraudulent investors' chat groups often use "market gurus" and "insiders" as the headliners to lure investors in. These chat groups disguise themselves as fan groups and interest groups whereby participants can get recommendations on stock investments from the "gurus". Some even demand a membership fee for users to join.

When users show interests during the livestream sessions by the "gurus", their "assistants" will pull the users into another group chat. The "guru", "assistants" and "fans" in these chat groups are actually all controlled by the scam group. Once an unsuspecting user join the chat group, their "show" begins.

At the start, the "gurus" in these chat groups will share the name and symbol of the stocks that they think have high potential. They will tell everyone that the prices of these stocks will skyrocket soon and ask chat group members to follow their lead and buy the stocks now. At this point, the "fans" in the groups will respond and follow the advices without any hesitation.

They repeat this gimmick every day, using the admiration and fellowship of all these "fans" to urge the users to "follow" them.

On top of that, scam groups will also have "fans" inside the chat group share their respective earnings and ask for more advices from the "gurus" to convince the users further. These seemingly harmless exchanges are actually purposefully designed to "intoxicate" the users.

Scam groups create the illusion of constant profits to mislead users into thinking that there is no risk of losing money.

A 20-point profit, earning 10,000 in a day with an investment of 100,000... with these "live examples" right in front of their eyes, users gradually let down their guard. Even when there are losses, users will think that they are just unlucky, one-off events. With their minds being brainwashed by the promise of great profits, the users feel the impulse to try again without realizing the danger that awaits.

"Wild Guesses" with High Risks

Stay Alert, Don't Let Your Guard Down

In actual fact, the laws and regulations of different countries impose very strict requirements on securities and futures investment advisors. Most of the time, the "gurus" or so-called "chief analysts" of these chat groups do not have the relevant qualifications and do not have much knowledge of the stock market. They charge high membership fees and service fees, but the recommendations they provide have little value. Some of them even earn commissions by luring a large number of retail investors to take position. As a result, investors suffer heavy losses and the market order is disrupted to a certain extent.

In addition, some scam groups may even pretend to be registered investment companies and provide fake investment platforms for investors to put funds in. Subsequently, they will manipulate market prices from the backend and falsify records to defraud users of their funds.

Regardless the method, investors will suffer losses in the end when they follow the recommendations or instructions of these chat groups. Either their investments are tied down or they simply vanished together with the scam groups.

In accordance with the WeChat Terms of Service and WeChat Acceptable Use Policy, the WeChat security team is cracking down on stock recommendation activities that violate the related laws and regulations. The security team work closely with the police to protect the information security and legal rights and interests of WeChat users.

At the same time, the WeChat Security Center would like to remind users that in most cases, scammers make use of the lack of professional knowledge and gambling mindset of most retail investors to make them fall for their tricks. The WeChat security team reminds everyone that stocks, futures and other investments carry risks and choosing legal and reliable investment and financial management channels will stop scammers from achieving their aims.