How to verify a claim and report a fraud

In simple terms

Two habits protect you from most investment fraud: verify before you pay, and report fast if something goes wrong. Both rely on official sources that are free and open to everyone. This lesson explains what to check, where, and which authority deals with which kind of problem.

Always reach official websites by typing the address yourself, or by searching for the organisation's official site, never through a link sent by the person or firm you are checking. Fraudsters copy the look of official pages.

Verifying a person or firm

Registered intermediaries. SEBI publishes searchable lists of the firms and people it has registered, including investment advisers, research analysts, stockbrokers, depository participants, portfolio managers and mutual funds. For an adviser, the record shows the registration number, the name, contact details, address and the period for which the registration is valid.

When you check, compare everything:

• Is the name on the register exactly the person or firm contacting you?
• Do the phone number, email and address match?
• Is the registration valid today?
• Is the registration for the activity they are offering? A distributor is not an adviser; a broker is not a portfolio manager.

Fraudsters often display a real registration number that belongs to someone else, or a fake certificate. A matching number alone is not enough.

Payment accounts. A registered firm collects money in its own registered name, never into a person's private account. Before paying, check that the account belongs to the firm, using the verification options the firm and the regulator provide. A personal bank account or payment ID you cannot verify is a warning sign.

Company news. If someone tells you a company has won a huge order or is about to be taken over, check the company's official announcements on the NSE or BSE websites. Listed companies must disclose important events to the exchanges. If the news is not there, treat the claim as unverified.

Where to complain or report

SEBI's complaint system deals with complaints against the firms SEBI regulates, such as listed companies, registered intermediaries and market institutions. SEBI asks investors to take a complaint to the firm first, through its grievance officials; if it is not resolved, you can lodge it with SEBI and track its progress. This route is not for unregistered fraudsters, because SEBI does not regulate them.

The national cybercrime reporting system, with a helpline and an online portal, accepts reports of cyber crime, including online financial fraud. Reporting quickly matters most here, because the money trail can be followed while it is fresh.

If you think you have been defrauded

1. Stop paying. Do not send any more money, whatever you are told about fees, taxes or penalties needed to withdraw.
2. Contact your bank immediately and report the transactions as fraud.
3. Report it to the cybercrime helpline or portal, and keep the complaint reference number.
4. Save the evidence: screenshots of chats, the app, payment confirmations, transaction IDs, account numbers and phone numbers.
5. Secure your accounts. Change passwords, revoke any screen-sharing or remote access, and tell your broker if your trading account was involved.
6. Beware of "recovery" offers. People who contact you offering to recover lost money for an upfront fee are very often running a second scam.
7. Tell people you trust. Fraud thrives on embarrassment and silence. Warning others also helps.

Why it matters

Verification takes minutes and prevents most frauds, because fraud depends on you not checking. Reporting quickly gives the best chance of recovering money and helps the authorities stop schemes that are still taking money from others.

These tools also put you on equal footing with professionals. The same registers and filings that analysts use are free and public; you do not need anyone's permission or subscription to check a claim.

Limitations

No check is perfect. Registration shows that someone is permitted to operate, not that their advice is good or that they will behave well. Complaints and fraud reports do not guarantee your money will be recovered, and the process can take time. Websites, phone numbers and procedures change, so always find the current ones on the official sites. This lesson is general information, not legal advice; for serious losses, consider consulting a lawyer.

Common mistakes

• Verifying through a link the other person sends. It can lead to a fake copy of an official site. Find the official site yourself.
• Checking only the registration number. Match the name and contact details too.
• Taking an unregistered fraudster to the regulator's complaint system. Go to the cybercrime authorities and your bank instead.
• Waiting before reporting. Delay makes money harder to trace.
• Paying a "recovery agent". Genuine authorities do not charge you to investigate fraud.

Try it yourself

Without investing anything:

1. Go to SEBI's website yourself and find the list of registered investment advisers. Search for any adviser you have seen advertised. Is the name there, and do the contact details match?
2. Find the national cybercrime helpline number and reporting portal on the official government website and save both in your phone, so you have them before you ever need them.
3. Find the latest announcements of any listed company on the NSE or BSE website.

You now have the three tools that defeat most investment fraud.