Beginner traders are not aware of the market rules & regulations and often fall victim to one or the other frauds. Among those frauds, one of the most common ones is brokerage charges.
Now, as per the rule, for every trade you make using a broker’s platform, you have to pay a commission called brokerage charges. These brokerage charges vary from broker to broker.
In case, there is any update in the brokerage structure, the broker has to inform it before hand to its clients.
Well, it sounds obvious also.
But recently we came across the case where the broker charged ₹5,00,000 brokerage in a day on the trading account of Mr. Akhilesh (name changed), one of the clients of ICICI Direct.
On understanding the details of the case, one more scam came out and now he is fighting to get his lost amount back.
Here is what exactly happened.
Akhilesh received a call from Manoj (name changed). Manoj claimed himself to be associated with ICICI Direct and offered him advisory services. Akhilesh was a beginner and had no understanding of the market and agreed to take tips on him.
Since ICICI Direct is a full time stockbroker, there could be a chance that research analysts or advisors reach out to people to promote the broker’s service and there is nothing wrong in that too.
But this person put a following conditions:
- He asked him to open a demat account with ICICI Direct.
- Also, he asked him to share 10% profit.
- Last but not the least he asked him to share his login credentials after opening an account so that he can take trades on behalf of Akhilesh.
Apart from the first point, the other two points themselves are BIG RED-FLAG. If Akhilesh would have had some experience, he might have not fallen into this trap. But unfortunately, he was not and he agreed with the above conditions.
Akhilesh checked the brokerage fees and it was ₹20 per trade. He opened a demat account and shared his credentials with Manoj. Initially, Manoj took a few trades and earned profit.
On seeing this, Akhilesh added around ₹8 lakhs in his trading account.
Here the game changed, at the end of one day, Akhilesh received a contract note with the brokerage of ₹5 lakhs.
When he checked the app he found that Manoj had taken multiple trade positions that day. Furhter he found that the brokerage was charged on the basis of ₹20/lot instead of ₹20/trade.
He called Manoj who didn’t pick his call.
Later, when he reached out to ICICI Direct, he came to know that no person with the name Manoj worked with them. Also, the request to upgrade brokerage charges was generated using his ID only.
Now, this leads to multiple questions:
- Was it the brokerage scam?
- Did a stock broker hire someone to earn brokerage?
- Was it an account handling & profit sharing scam where scammers impersonate him as an ICICI Direct employee.
- Is it the greed of Akhilesh to get rich effortlessly?
Here, Akhilesh if had taken proper steps after doing market research then he could have saved himself from this scam and loss.
Now, he has two options:
- To file complaint in NSE against a stockbroker to request an arbitration.
- To lodge a complaint in SCORES portal against a broker.
Cases like these are limitless but with timely approach and proper documentation, you can get your lost money back. In case you need assistance to take this forward to market participants, then get in touch with us now.
