Zerodha’s Nithin Kamath says fake trading app scams are ‘mega nuisance’, shares awareness video

Zerodha's Chief Executive Officer (CEO) Nithin Kamath shared his views on the surge of fake trading app scams, which have become a “mega nuisance”.

“Fake trading app scams have exploded and have become a mega nuisance,” Kamath said in a post on X on Monday, August 26.

Kamath highlighted how fake brokerage app scams initially make the people who are willing to invest think that making money is easy. They are added to a WhatsApp group and then asked to install fake trading apps that look similar to the real ones.

“These scams work by inducing you to trade and making you think that making money is easy. So first, you are added to WhatsApp groups and then asked to install fake trading apps that look exactly like those of major brokers,” the brokerage firm's head stated in his post.

How the fake trading app scams are designed?

The scams are designed to make people who invest money believe that they will make profits, but these are limited to the initial trades. The traders are then asked to transfer money to continue trading. When they try to withdraw their money, they are asked to pay fees, taxes, etc.

“On the first couple of trades, you will make money. This is designed to convince you that you can make a lot of money. Then you'll be asked to transfer money to trade. But when you try to withdraw, you'll be first asked to pay fees, taxes, etc,” said Kamath in the post. 

“After some time, the entire group and the people in it vanish,” he noted, highlighting the scam.

Kamath also talked about smart, sensible, and educated people falling into this trap of fake trading app scams and shed light on how important it is to realise one factor that, “if something is too good to be true, it almost always is.” It is important to be sceptical about the claims of easy money, he opined.

Zero1 by Zerodha, an education initiative programme by the brokerage house, in collaboration with the Cyber-safety and Cybersecurity awareness handle of the Ministry of Home Affairs, also posted a video increasing awareness of the rise of “Fake trading app scams” on the post shared by Nithin Kamath on X.