A 77-year-old retired resident of Bengaluru narrowly avoided losing more money in a sophisticated fake stock market scam, thanks to an alert generated by the artificial intelligence chatbot, ChatGPT. The victim had already been duped of a staggering ₹67.10 lakh before the AI tool helped him uncover the fraud.
The Elaborate Fake IPO Trap
According to a First Information Report (FIR) registered at the Cyber Crime Police Station (CCPS) in Bengaluru on January 3, 2026, the ordeal began in November last year. Individuals pretending to be representatives of the well-known IIFL Wealth Management approached the Binnypet resident. They promised him lucrative "pre-IPO allotments in sizable quantities." Persuaded by their claims, the senior citizen signed an agreement and made an initial deposit of ₹5 lakh.
The scammers then informed him that he had been allotted 150 shares of ICICI Prudential AMC, showing a paper profit of ₹80,000. Encouraged by this apparent success, he invested another ₹23.10 lakh for a second IPO. However, the fraudsters allotted him a massive 2.24 lakh shares at ₹45 each, far exceeding what he had asked for or could afford.
The Loan Lure and The Refusal That Raised Alarm
When the retiree expressed his inability to pay for the excess shares, the con artists offered a solution: a loan of ₹36.79 lakh at a 13% interest rate, requiring a repayment of ₹42 lakh. The victim agreed to this arrangement. On January 1, he was instructed to sell the 2.24 lakh shares at ₹125 per share, which projected a colossal paper profit of nearly ₹2 crore.
The final red flag appeared when the victim requested that ₹40 lakh be released to him from the proceeds, with the loan amount adjusted. The scammers flatly refused this request. This refusal triggered his suspicion, prompting him to investigate the firm's background.
How ChatGPT Unmasked the Fraudsters
It was at this critical juncture that the retiree turned to ChatGPT. Upon querying the AI chatbot about the organisation he was dealing with, he received alarming information. ChatGPT revealed that the entity was fraudulent and had numerous complaints lodged against it. This AI-generated alert was the crucial piece of evidence that stopped him from potentially losing more funds.
The Bengaluru police have registered a case under multiple sections, including:
- Section 66C (punishment for identity theft) of the Information Technology Act, 2000.
- Section 66D (cheating by personation using a computer resource) of the IT Act.
- Section 318(4) (cheating & dishonestly inducing delivery of property) of the Bharatiya Nyaya Sanhita (BNS).
- Section 319(2) (cheating by personation) of the BNS.
An officer confirmed that a thorough investigation into the ₹67.1 lakh scam is currently underway. This case highlights a modern twist on financial fraud, where emerging technology is used both to perpetrate crimes and, in this instance, to help prevent them.
