To prevent users from getting scammed by apps, Apple and Google have removed more than 300 financial trading apps from their respective app stores. The move comes after an investigation done by a newspaper and review by securities & investment body suggesting that thousands of users being scammed by these apps - mostly senior citizens. Reportedly, some of these users also lost their life savings.
A report from The Independent states that scams reported to British police reveal the major scale at which these scams are operating. The main scam is being done in the name of ‘binary options’ trading.
Report by The Independent notes:
Binary options platforms encourage investors to make apparently simple bets on whether shares or currencies will rise or fall in value over time. Many such platforms are legitimate, but an increasing number have been popping up across Australia, the UK and elsewhere that are fraudulent.
Most of the victims were urged to make hefty payments up front from their pension funds to invest in the financial trading apps.
Here is a personal account of one of the scamming victims, Elizabeth Ablett :
Elizabeth Ablett from Derbyshire said that she signed up to a platform caller Binary Uno in December 2016. The 70-year-old’s husband had died the previous year and she didn’t have a pension big enough to live on.
Ms Ablett said that she initially invested £200 with the company, but that individuals who described themselves to her as “brokers” convinced her to up her stakes, telling her she was trading on the performance of gold and stocks.
By the end of March, she said, she had invested a total equivalent to almost £40,000, nearly her entire life savings. The following month, she said, her online account balance was shown to have slipped to zero. She said that nobody at BinaryUno answered her calls.
An intervention by the Australian Securities and Investments Commission (ASIC) follows the decision of apps removal by Apple and Google.
ASIC said it had conducted a sweeping review of mobile app stores focusing on those associated with so-called binary options trading. It said that the review highlighted over 330 apps that were offered by entities and individuals that appeared to be unlicensed.
Among all the scamming apps, most were found actively engaging in misleading users to take significant risks in greed of making high profits. Around 80% of these apps did not even provide legally-requisite warnings regarding the risks. Others were found to be entirely deceitful, with an actual way to earn profits or even recover the amount invested by the users.
Australian Securities and Investments Commission (ASIC) also said that it is delighted by the pace at which both Apple and Google took action and removed the scamming apps.
Most of these fraudulent apps are run by the companies in the foreign countries. Surprisingly, regulatory authorities are often helpless to keep a tab on such apps. A lawyer who is trying to help the victims in recovering their money lost in the scam. The only way to help the victims is to freeze the accounts of the scamming companies and also false binary options.
Apple and Google have done a commendable in removing such apps from their app stores. We would like to advise our users to stay away from financial trading apps as most of them are made with the motive to scam users.