- 02 Jul 2025
Clone Apps: The New Cyber Threat in Stock Market Investing
As stock market participation grows across India, especially through mobile trading apps, a new form of cyber fraud is beginning to surface Clone Apps Fraud. These scams exploit the growing trust in online investing platforms and have already trapped hundreds of unsuspecting users. The scam operates by mimicking trusted apps like Zerodha, Groww, Angel One, and India Infoline, tricking users into handing over their money on fake platforms that only appear legitimate.
How the Clone App Scam Works
The fraud begins when cybercriminals create a counterfeit version of a popular stock trading app. These clone apps are nearly indistinguishable from the original ones same interface, branding, and functionality. Scammers distribute them through third-party websites or links sent via SMS, email, WhatsApp, or even paid advertisements on social media. Once the user installs the app, everything seems normal. They can register, deposit funds, and view what appears to be real-time market data and profits.
Initially, the platform may show small gains to win the investor’s trust. These “returns” are entirely fabricated. Encouraged by the apparent growth, investors are urged to invest larger amounts. But the moment the fraudsters believe they've extracted enough money, the investor’s account is suddenly suspended or locked, and the app stops functioning. By then, the money is gone and there’s little chance of recovery.
New Tactics: Service Charges and Fake Investment Schemes
In addition to clone trading apps, fraudsters are adopting more complex strategies. Many scammers now operate under the guise of portfolio management services or advisory firms. They promise to handle your investments professionally in exchange for service charges, entry fees, or management commissions. These fees often lure people into trusting the service before they even begin investing.
Another common tactic is the promotion of collective investment schemes (CIS). These schemes involve pooling money from several investors with the promise of fixed or high returns. However, in most cases, such schemes are not registered with SEBI (Securities and Exchange Board of India) and are therefore illegal. Often, the collected money is never invested in the market it simply disappears.
Legal Implications of Clone App and CIS Frauds
Running a collective investment scheme without SEBI registration is a direct violation of the SEBI Act, 1992 and CIS Regulations. Involvement in such activities may also lead to criminal charges under:
- Bharatiya Nyaya Sanhita (2023) – for cheating and criminal breach of trust
- Information Technology Act, 2000 – for cyber fraud
- Prevention of Money Laundering Act (PMLA), 2002 – if the money is funneled through illegal channels
SEBI has consistently warned investors through circulars and public advisories, urging them to avoid unauthorized apps and unregistered schemes. Their clear message: No legitimate investment can offer guaranteed returns. All investments in the stock market are subject to market risks, and anyone promising otherwise should be treated with caution.
How to Protect Yourself from Clone App Scams
Preventing yourself from falling into such traps begins with digital awareness. Here are a few best practices:
- Only download trading apps from official sources, like the Google Play Store or Apple App Store.
- Verify the app developer’s name and check user reviews and ratings before installation.
- Do not trust unsolicited links, even if they claim to offer high returns or exclusive offers.
- Check if the platform or advisor is SEBI-registered. SEBI’s official website has a searchable database for verification.
- Be highly skeptical of “guaranteed returns” or unusually high profit claims—they are usually signs of a scam.
The Bottom Line: Stay Informed, Stay Safe
The use of technology in investing has made it easier for the common investor to participate in the stock market. However, it has also created a fertile ground for sophisticated frauds. Clone apps, fake advisory firms, and illegal investment schemes are exploiting people’s desire for quick profits. The only real protection lies in awareness, verification, and caution.
Investing should always be preceded by thorough research and due diligence. No matter how attractive an offer seems, remember: if it sounds too good to be true, it probably is. By staying informed and alert, you can protect yourself and others from falling victim to these digital financial traps.
If you suspect you’ve encountered a clone app or have been defrauded, consider reporting it to cybercrime authorities or SEBI immediately. Quick action can sometimes prevent greater damage and may help trace the fraudsters involved.
