Money Traps That Target Students

The scams and risky products that often target young people - illegal loan apps, betting and gaming, pyramid schemes, fake jobs and investment frauds - and how to avoid them.

Young people are often targeted by scams and risky financial products. Knowing the warning signs protects your money and wellbeing.

Illegal loan apps

Some apps offer instant small loans with little checking, then charge huge hidden fees and interest. When borrowers struggle to repay, some illegal apps have used harassment, including threatening messages to contacts. The RBI has warned against unregulated digital lenders.

Protect yourself: borrow only from RBI-regulated banks and NBFCs, check the lender on the RBI website, and never give apps access to your contacts and photos.

Betting and gambling apps

Online betting and “real-money” games can lead to large losses and addiction. India’s 2025 law banned online money games, but illegal offshore betting sites remain. Avoid them.

Pyramid and MLM schemes

Pyramid schemes promise high earnings for recruiting others. Some multi-level marketing schemes pressure young people to buy products and recruit friends. Most participants lose money.

Fake jobs and internships

Offers that ask for fees for training, registration or equipment.
“Work from home” tasks, like liking videos, that start with small payments and then ask for deposits.
Task scams on messaging apps.

Investment frauds

“Guaranteed” high returns on crypto, trading or forex.
Finfluencers selling trading courses or tips without SEBI registration.
Telegram or WhatsApp groups promoting “pump and dump” stocks.

Warning signs

Pressure to act fast.
Guaranteed or unusually high returns.
Requests for upfront payments.
Requests for your OTP, PIN or passwords.
Unregistered companies.

If you’re caught

Stop paying immediately.
Report to the national cybercrime helpline 1930 or the cybercrime portal.
Talk to family or a trusted adult.

The task scam

A student is offered money to like videos online. She earns 150 rupees for the first few tasks. Then she is asked to deposit 5,000 rupees to unlock "premium tasks". She deposits and never sees the money again.

Thinking only careless people fall for scams

Scams are designed to be convincing and often target busy, trusting or financially stressed people.

Key takeaways

Illegal loan apps charge hidden fees and may harass borrowers.
Betting apps, pyramid schemes and fake jobs cause losses.
Guaranteed returns and upfront fees are warning signs.
Report fraud to the 1930 cybercrime helpline.