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Pump and Dump Scam

In short

A stock is aggressively promoted to drive buying and price increases The objective is typically to leave late buyers with losses when promoters sell and the price collapses.

What it is

Promoters circulate misleading excitement, tips or claims designed to create demand. The victim is then pushed to buy the promoted security at an inflated or manipulated price.

How it starts

A stock is aggressively promoted to drive buying and price increases.

What they tell you

Promoters circulate misleading excitement, tips or claims designed to create demand

What they want you to do

Buy the promoted security at an inflated or manipulated price

How you lose money

leave late buyers with losses when promoters sell and the price collapses

What happens next

After the first successful step, the fraudster may demand more money/information, deepen account or device access, or disappear.

Warning signs

FOMO | social proof | greed | urgency | coordinated promotion | market manipulation

Where this is documented

India — officially documented by an Indian authority/regulator

How to avoid it

Verify the intermediary and app through SEBI/RBI-authorized channels; reject guaranteed-return claims and pressure to move money to personal or unrelated accounts.

If it already happened

Contact the bank/payment provider immediately if money moved; report financial cyber fraud promptly via 1930 and cybercrime.gov.in; preserve messages, transaction IDs, phone numbers and URLs.

Known variants

  • Small-Cap Pump VariantA thinly traded/small security is aggressively promoted before promoters sell.

Sources

Published documents this page draws on.

Already sent money or shared something?

What to do now

Pump and Dump Scam — Scam types