Chasing high returns, losing it all: The trap of fake trading apps

The path to wealth creation lies in discipline, patience, and secure platforms.

In the last couple of months, there has been a disconcerting, rising trend — scams by fake trading websites that mislead  innocent investors. What starts out as a wish to make a quick buck ends up being a nightmare where people lose their entire savings, take loans, and end up mentally and financially drained.

Retirees, government and private sector employees, even defence personnel — people who are typically conservative with their investments — have all fallen prey to such scams.

The modus operandi

The tricksters reach out to their targets via Instagram, WhatsApp, Telegram,  etc. The conversation starts off on a friendly note, inviting them to `investment groups' that appear genuine, with alleged market gurus offering advice and proof of profitable trades on a daily basis. The cheats then push users to download fake trading apps that closely resemble authentic financial platforms.

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These apps have visuals that mimic real-time stock market movements. Once victims start investing they can see their `profits' accumulate on the screen. This encourages them to  invest more — some even break their fixed deposits (FDs), borrow against mutual funds, or borrow from friends and relatives.

But the illusion is shattered when they attempt to withdraw the money.

The withdrawal trap

When investors attempt to take out their money, they see errors like:

• “Withdrawal request failed due to tax non-compliance”

• “Technical error, please deposit a margin to unlock funds”

• “KYC pending, please pay ₹50,000 to complete withdrawal”

By the time the victims realise they’ve been duped, it’s too late. The apps disappear, phone numbers become unreachable and WhatsApp groups are deleted. The scammers simply vanish — leaving behind shattered dreams and empty bank accounts.

Real stories, real victims

The following are not isolated incidents. Across the country, professionals from all walks of life have been affected:

• A retired Air Commodore lost ₹1.45 crore

• A 66-year-old Pune retiree lost ₹2.5 crore

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• A retired agriculture officer from Kerala lost ₹43 lakh

• A scientist lost ₹2.08 crore, part of it borrowed from friends

• A 37-year-old software engineer lost ₹28 lakh

• A microbiologist was cheated of ₹39 lakh

Each of these individuals was financially literate, yet were lured by the false promise of `guaranteed profits.'

Why are so many falling for it?

1. Greed of high returns: compared to low FD interest rates, 15-20 percent returns per month seems attractive.

2. Psychological manipulation: scammers build confidence by showing initial `profits.'

3. Realistic user interfaces: it is difficult to differentiate the fake applications from the real ones.

4. Fear of missing out (FOMO): the victim is afraid that he / she is losing out on something that their peers seem to be enjoying.

What can you do to protect yourself?

• Never download trading apps from third-party websites. Always use authenticated portals of SEBI-registered brokers.

• Cross-verify any investment group before joining. Frauds operate using fake identities and manipulated screenshots.

• Don't give OTPs, your PAN, or bank login credentials to strangers or enter them on unverified platforms.

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• Avoid 'too-good-to-be-true' returns. No investment gives 10-20 percent returns per month.

• Use SEBI-registered investment advisors or AMFI-registered distributors.

• Do not trust self-proclaimed "market experts" with no credentials when it comes to making investment decisions.

Cyber frauds make us realise how intelligent people can become victims of psychological and emotional manipulation.

The path to wealth creation lies in discipline, patience, and secure platforms — not shortcuts and promises of instant riches.

The author is CEO and CIO of Wise Finserv