'Avoid shady trading apps': NSE, BSE íssue alert against trading scams

In an advisory issued for investors, NSE and BSE specified that fraudulent actors are using both Indian and international phone numbers to orchestrate their schemes

The country’s two primary stock exchanges – the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) – have cautioned investors against “unscrupulous persons and entities falsely claiming to offer trading opportunities”.

In an advisory issued for investors, the two stock exchanges specified that fraudulent actors are using both Indian and international phone numbers, as well as social media accounts, to orchestrate their schemes.

"It has been brought to the Exchanges' attention that some unscrupulous persons or entities, operating through Indian and international mobile numbers and social media platforms, are falsely claiming to offer trading opportunities through Foreign Portfolio Investment (FPI) or Foreign Institutional Investor (FII) schemes, impersonating reputed financial institutions," the advisory read.

Avoid shady social media groups

Investors were also advised to exercise caution and refrain from joining social media groups where stock recommendations are provided alongside market analysis, or from downloading any apps offering investment opportunities.

The advisory urged investors not to subscribe to any schemes, referrals, or products that guarantee returns in the stock market without verifying their authenticity. Investors were also advised not to share their trading account credentials, such as user ID or password.

"Investors should understand that investments offering high returns usually involve high risks and could be fraudulent," said the advisory.

Most common forms of scams

The advisory also listed some of the most common forms of scams. Here are a few of the major ones:

• Claims of association with reputable individuals/organisations
• Providing unregulated trading platforms and unauthorised trading applications
• Luring investors to join or create institutional accounts and guaranteeing high returns with an official account
• Offering guaranteed returns on investments in the Capital, Forex, or Commodities markets
• Offering services to handle investors' trading accounts and requesting their login credentials

'Report fraud to Chakshu'

In cases of suspected fraud, the exchanges advised investors to report it to the Chakshu facility (http://www.sancharsaathi.gov.in). If an investor has already lost money, they should report the incident to the cybercrime helpline at 1930 or via http://www.cybercrime.gov.in. Additionally, investors are advised to refer to the stock exchanges' web pages to verify the authenticity of trading apps.