{"id":252729,"date":"2020-04-17T19:22:46","date_gmt":"2020-04-17T13:52:46","guid":{"rendered":"https:\/\/zerodha.com\/z-connect\/?p=252729"},"modified":"2024-02-02T14:09:53","modified_gmt":"2024-02-02T08:39:53","slug":"beware-of-the-phishing-scam","status":"publish","type":"post","link":"https:\/\/zerodha.com\/z-connect\/featured\/beware-of-the-phishing-scam","title":{"rendered":"Beware of the Phishing Scam"},"content":{"rendered":"

Hindi:<\/strong> \u0907\u0938 \u092a\u094b\u0938\u094d\u091f \u0915\u094b \u0939\u093f\u0902\u0926\u0940 \u092e\u0947\u0902 \u092a\u095d\u0928\u0947 \u0915\u0947 \u0932\u093f\u090f \u092f\u0939\u093e\u0901 \u0915\u094d\u0932\u093f\u0915 \u0915\u0930\u0947\u0902\u0964<\/a><\/p>\n

I had recently written this post<\/a> on stock market scams that everyone should be aware of. It was about how fraud advisors get you to take positions in illiquid option contracts and intentionally create a loss, moving money from your account to theirs. Some of these advisors push investors to buy scammy penny stocks and run the price up, leaving investors trapped with low value, illiquid stocks that cannot be exited (\u201cPump and dump\u201d).<\/p>\n

We have seen a significant drop in these cases after we implemented a bunch of measures to prevent these scams on Kite \u2014 blocking illiquid option contracts, reporting any scammy trade to the exchanges, and alerting customers using Nudge about a stock being a risky penny stock on the buy order window.<\/p>\n

We have now come across a new type of scam.<\/p>\n

The Phishing Scam<\/h2>\n

Fraudsters set up phishing<\/em> (fake) websites that mimic the look and feel of the login pages of the trading platforms offered by large stock brokers. These websites are then sent out to unsuspecting investors via SMSes, e-mails, and social media with contact data stolen from various sources.<\/p>\n

Unsuspecting investors then happen to click on these links which lead to fake websites that mimic the login pages of the trading platforms they are used to, where they enter their login credentials (username, password, PIN, and other bits of information). This is captured by the fraudsters, which they then use to login to the investor\u2019s trading account to execute buy\/sell transactions on illiquid scammy penny stocks, generating a loss on the compromised account and a profit in theirs (counter-party to the scam orders). They can potentially also trade on illiquid option contracts or just buy scammy penny stocks to be sold later.<\/p>\n

If you don\u2019t have any cash balance in your account, they sell your existing holdings to fund these fraud trades. Check these trades<\/a> on one of our client\u2019s accounts (shared with the client\u2019s consent) that we spotted recently. The customer got tricked into sharing his login credentials at around 9 AM, and by 10 AM the fraudsters logged into the trading account, sold stock holdings worth around Rs 70,000 and created a loss of over Rs 60,000 within a few minutes.<\/p>\n

What can you do about it?<\/h3>\n