In recent decades, internet trading sites & mobile trading applications have emerged in large numbers in India. More people are getting the opportunity to take part in trading. But, this boom has also increased the incidence of trading app scams, putting at risk many investors who download such apps.

This blog explains what trading app scams are, the strategies that fraudsters use, and how to protect yourself in the trading app domain.

What are Trading App Scams?

Trading app scams entail fraudulent activities that are undertaken using mobile apps that purport to offer trading services.

Fake Trading Apps

These are fake applications that look like genuine trading platforms. Once on the device, they can steal personal & financial details, and even control the device without user’s permission.

Phishing Scams

There are fake emails, messages, or ads from scammers impersonating genuine trading platforms. Many of these communications include links to cloned websites with the purpose of stealing your login details and other critical data.

Ponzi Schemes

Fraudulent trading apps are Ponzi schemes. They set very high returns with low risks involved. Initial investors may begin to get some of their money back, but these returns are often paid for by later investors. Finally, the scheme fails, and most of the investors end up with large losses.

Pump and Dump Schemes

Swindlers provide false and misleading information to the public about the price of a particular stock to lure investors. After the shares have reached a certain price, they dump the stocks, thus lowering the price and leaving investors holding merely pauper.

Common Tactics Used by Scammers

High-Pressure Sales Tactics: Con artists tend to pressure you into making hasty investment decisions that may not be in your best interest.

Too-good-to-be-true offers: Claims that one will earn high returns with little risk are always signs to avoid. It is always a risk when engaging in legitimate trade.

Impersonation of Legitimate Companies: It is common to find fake trading sites that mimic actual trading platforms or genuine financial institutions to lure you into their scheme. They often mimic genuine websites and applications used in daily life.

Social engineering: This entails tricking people into releasing sensitive information. There are instances where the con artists can pretend to be from the customer service team or technical support team.

How to Stay Secure?

Research the trading platform

Before downloading any trading app or signing up for an online trading platform, conduct thorough research.

• Check for reviews and ratings on market platforms, such as stores and independent reviews. Always avoid any app that has many bad reviews or new apps on the market.
• Verify Registration and Regulation. Make sure the online investment forum is registered with the regulatory bodies, such as SEBI. Regulation gives another level of assurance to the investors.
• Examine the Website and App. Check the professional appearance and layout of the website and application. Lack of proper interfaces or even constant glitches might be a sign of an actual scam.

Use Strong Security Practices

Implementing strong security practices to protect your personal and financial information:

• Enable two-factor authentication (2FA). It works on top of the password. You must input another form of identification before accessing the application.
• Use Unique Passwords. Both trading accounts should have secure and different passwords.
• Regularly Update Your Software. Ensure the trading app and device software is always updated to avoid exploiting existing vulnerabilities.

Be Wary of Unsolicited Communications

Exercise caution with unsolicited emails, messages, or phone calls claiming to offer investment opportunities:

• Verify the Source. Only contact the official phone number or email used for company correspondence to determine the validity of the communication.
• Avoid Sharing Personal Information.

Monitoring Your Accounts Regularly

Regularly monitor your trading accounts for any unauthorized transactions or suspicious activities.

• Set Up Alerts. Most trading platforms provide alert notifications of key activities within an account. Allow these alerts to help track these accounts for any suspicious activity.
• Review Account Statements. Check your account statements for any irregular or unknown transactions. Under no circumstances should you fail to report any malpractice to your trading platform.

Educate Yourself

Stay informed about the latest scams and cybersecurity practices:

• Follow Reputable Sources. Read financial and cybersecurity news to figure out what new threats exist and what precautions individuals and businesses should take.
• Take part in Community Forums. Take part in trading-related forums or groups, cybersecurity-related forums or groups. Engaging with other users and exchanging information and tips can be beneficial.

Conclusion

Financial frauds, particularly trading apps, are on the rise, but by being aware of them and using the right security measures, one would not be a victim. To reiterate, while trading is indeed a great way to make money, one must always be wary of these trades and carry out the necessary research to ensure that one is not a victim of fraud.

Secure Network Solutions (SNS) is committed to delivering technically perfect and practically implementable cybersecurity solutions to secure your businesses from cyber threats.

Write us an email to [email protected] with your queries/requirements related to support and implementation of security solutions.

Swathi
Author

Working IT professional and a Cyber Security enthusiast. Passionate to write about Cyber Security topics and Solutions. I share my insights as I study articles and trending topics in the field of Cyber Security.