330 fraudulent trading apps culled from App Store and Play Store globally

The Australian Securities and Investments Commission (ASIC) reported today that Apple and Google have pulled unlicensed trading apps from their respective App Store and Play Store.

More than 300 so-called binary options trading apps for iPhone, iPad and Android devices have been culled from both stores globally. According to an Apple spokesperson, the apps were removed from App Store in accordance with the Cupertino company’s recently updated App Store Review Guidelines that now prohibit such apps.

“Apps that facilitate binary options trading are not permitted on the App Store,” said an Apple spokesperson, adding tht users should “consider a web app instead”.

Apparently, users reported numerous cases of fraud involving unlicensed operators of the apps, which encourage consumers to make bets on whether instruments like shares or currencies will rise or fall.

“We remove applications that violate our policies. We don’t comment on individual applications,” said an Australia-based spokesman for Google.

Of the 330 apps that have now been removed from both stores globally, about 80 percent had no warnings about the risks inherent in trading, ASIC said.

Bloomberg quoted Greg Yanco, head of market integrity at ASIC, as saying that some of the apps “made outrageous claims”, noting that there is “an issue globally with these products.”

“While some are legitimate operations, there has been an explosion in unlicensed products operating across borders and beyond the reach of regulators,” Bloomberg noted.

The Independent newspaper conducted its own investigation into the matter, finding that an increasing number of fraudulent binary trading apps have been popping up across Australia, the UK and elsewhere in recent years.

“It seemed that some investors made money in the demo mode but lost money once they moved to a live trading system,” the investigation concluded. Many of the companies that operate these apps are based overseas and are attracting increasing numbers of users.

ASIC cited cases where consumers are unable to withdraw cash from their accounts or make winning trades nine times out of ten in the demonstration app.

Pensioners in particular appear to have been targeted by the fraudulent apps, with some saying their investments are frozen if they try to withdraw their money.