A Practical Guide to Identifying Fake Trading Apps

Bengaluru: This year has seen a sharp rise in scams run through fake trading platforms. Regulatory bodies such as the Securities and Exchange Board of India (SEBI) and the National Stock Exchange (NSE), among others, have been cautioning investors through awareness programs. News channels are reporting these warnings as well as how these scams are happening to educate people, yet many of us are losing our hard-earned money.

These scams are not isolated cases. For example: In 2025, a Hyderabad businessman lost ₹3.24 crore owing to a fake trading app and a Thane victim was duped of ₹4.11 crore in a trading scam. Law enforcement has been aggressively cracking down on these operations. While multiple arrests have been made, and illegal accounts have been frozen, still scams are happening.

While regulators and authorities are doing their part, it is important for us to know how to protect ourselves. So, let’s understand how we can safeguard ourselves.

First, let’s understand how the scam works:

The scam pattern is often as follows: you will receive a WhatsApp link, YouTube link, X (Twitter) link or Telegram link → you are invited to a group → asked to install an app or use a link → the "traders" on the app or platform show quick and unreasonable gains → you feel like you are making money → then, when you try to withdraw those profits then the broker either demands more "fees" or disappears.

Here are five quick checks before you trust any trading app or platform:

Verify SEBI Registration - Always: Ask for the broker's SEBI registration number. Search for it on SEBI's Recognised Intermediaries list. If you are unable to locate it on the SEBI website or the broker is evading sharing these details, then avoid investing in such platforms.

Check how they are accepting payments: Legitimate brokers collect funds through registered corporate bank accounts or verified UPI handles, not personal UPI IDs or unverified bank accounts. If they say, “send to my UPI/personal account first,” it’s a red flag. Regulators are moving to validated UPI handles for registered intermediaries/brokers because of this exact risk.

Too good to be true returns or pressure to add more money: Guaranteed returns, urgent “limited time” calls, or admins who pressure you to add more money are classic baits. Scammers will let you withdraw a tiny amount first to build trust, then block larger withdrawals.

Verify the App Source: Download only from Google Play / Apple App Store in the company's actual name. Don't use links from chats or advertisements. Check the developer’s name and company website; call the official phone number on the company website to verify the app.

Ask your trusted source: Before investing in an unknown platform, talk to people that you trust. We all have that circle of friends, colleagues, family or people we turn to for advice or to discuss anything - the latest diet fad to recipes to best place to buy electronics from. Tap into that network and check if anyone has heard of it. If most say no, then do not invest.

Now that we know how to protect ourselves, here is your scam-proof checklist:

Check on SEBI's website before you install or invest.

Never transfer money to personal accounts.

Only use brokers or banks that you already know and trust.

Don't pay attention to "secret tips" in an unknown or unverified online group.

Check with your bank or a trusted adviser, if you are unsure.

Save screenshots, chat logs, and receipts - report suspicious incidents or as soon as you become aware that you may have been a victim of a fake trading scam to cybercrime.gov.in or dial the national cybercrime helpline which is 1930.

In conclusion, if the investment app is promising great returns in a short time, requires payment into an individual's personal account, or arrives in your inbox through a random group - it's not an investment, it's a trap! Best to avoid investing in such a platform.

By Himanshu Sahu, Head of Engineering, Share.Market (PhonePe Wealth)