Clone trading apps that look exactly like genuine trading apps are misleading retail traders and investors, leading them to lose their entire capital.
People often come across these apps through ads on social media platforms, where they are provided with a link to join a Telegram or WhatsApp group.
Enticed by the promise of huge profits displayed in the group created an interest for investment using the platform.
Seeing the right time, the group admin shares a link to download the app, and at first glance, the trader finds it to be a genuine trading app as it resembles top-rated trading apps like Zerodha and Angel One.
The registration and eKYC processes are similar to those of these trading apps, which does not leave them with any doubts or questions. Upon completing the process, they are then asked to add funds, which actually get transferred to the scammer’s bank account.
Sometimes, the scammer shares bank details to transfer funds, which is the first red flag, but most traders and investors ignore it and fall into the trap.
Here is one such instance on How Mr. Manav fall in the trap of Clone Trading App and Lost More than ₹10 Lakh in a Few Weeks?
Mr. Manav (name changed) first joined the group named Asset Investment & Finance Group (name changed) and was then added to another group named Roshan Stock Journey (name changed).
Like other groups, different investment and trading opportunities with fake profits were displayed in that group too.
Upon seeing those screenshots, Manav downloaded their app using the link provided in the group and added INR 9,70,000.
Initially, the app showed him some profit, and he withdrew INR 1 lakh twice, leaving a fund balance of INR 7,70,000.
After a few days, when he checked his portfolio, the app displayed a profit of INR 90 lakhs.
This excited Manav, and he added INR 5 lakh more to the trading account, expecting to grow his money.
Then, the scammer approached him with an investment opportunity, asking him to add INR 5 lakh to invest in an IPO to double his money. However, due to a shortage of funds, Manav denied that advice.
A week later, Manav tried to withdraw INR 5 lakh from the account but was unable to do so.
When he contacted the scammer on WhatsApp, the scammer asked him to pay 18% GST on the profit amount of INR 90 lakh to complete withdrawal transaction.
Manav then asked the scammer to share the GST details so he could directly make the payment using those details or share some Income Tax details.
Of course, the scammer denied sharing those details, making Manav realize he had been scammed.
And like other scams, Manav was blocked by the scammer.
Although Manav didn’t stop there and reported the case to SEBI, he did not get a satisfactory response as the scammer was not SEBI registered.
He then reached out to Cyber Crime first and then to the local police station.
However, he didn’t get a solution in either place and was left disappointed in the end.
Now, these clone trading app frauds are increasing at a significant level. However, a little awareness and alertness can prevent you from falling into such scams, as they leave many signs and red flags, such as:
- The app link which redirects to a site other than Play Store or App Store.
- Addition of funds directly to a bank account.
- Promises of 10x or more returns in a week or fewer days, which is not realistic.
- Investment advisory without any SEBI registration or license.
