Trading apps: Blind trust can invite disaster, run this check first, says SEBI

Kolkata: With digital investments proliferating, dozens of trading apps have caught the fancy of millions of investors. There are a variety of trading apps that are appropriate for different category of people -- beginners, active traders, integrated banking services and budget-conscious investors. While they definitely provide a lot of service for a large number of people, capital market regulator Sebi urges people to exercise caution and not to trust any app blindly.

The first standard procedure is to check whether the app is registered with Sebi. The regulator has launched tools to check security of such apps. These are @valid UPI handle and SEBI Check tool. Experts advise one to check whether the platforms are registered and verified and whether transactions will be safe. This is necessary since if you blindly trust an app that happens to be run by digital scamsters, your bank account can be emptied in a few seconds. The rising number of frauds has prompted the Cyber ​​Crime Coordination Centre of the Central government to issue advisories centering fake trading apps. Not only money but also personal information which are financially sensitive will fall in the hand of fraudsters.

Social media platforms are a favourite hunting ground for the scamsters. They fish for unsuspecting investors and common people on WhatsApp groups or on YouTube, Twitter, or Telegram, where they invite people to share links and install an app. These apps display fake traders and even claim unrealistic profits to lure more and more people. Those who invest think their money is growing fast. But the trap comes to light when they try to withdraw the gains. The broker charges a lot of fees or simply disappears, leading to the lost of investments, and possibly, sensitive data.

The standard caution that experts issue is, never fall for the promise of absurdly high returns. None can promise anything like that and these are inevitably made by people with doubtful intentions. Apps should be downloaded only from Google Play Store or Apple App Store. Also one should verify the developer's website.

Sebi has urgently come forward to help common people from the elaborate network of fraud that scamsters have laid out. These are: the @valid UPI handle and the SEBI Check tool. These are UPI IDs exclusively designed for SEBI-registered intermediaries. They are used with a "@valid” identifier and a suffix which is (. brk) for brokers, and (. mf) for mutual funds. This can guide an investor to SEBI-authorised companies, fund houses, brokers etc. Experts say that users will see a green thumbs up as a marker for trusted transaction.

SEBI Check is another functionality which can help one verify the authenticity of bank account details apart from UPI IDs of SEBI-registered intermediaries. One can apply SEBI Check when they are paying through @valid handles or other modes like NEFT, RTGS, or IMPS.