How to stop unwanted trading calls and SMS?
If you have actively traded in stocks, you may have come across people who receive “tips” to buy and sell certain stocks via text messages and phone calls from unknown phone numbers, even if They have not consented to receive any such suggestion to a third party. ,
Such suggestions are known as “unsolicited stock tips”.
They are known as “unsociated” because of people receiving them involuntarily.
Unsolicited stock tips through calls and messages are used as a method of price manipulation by an operator to push up the price of a certain stock.
How does this work?
Let’s say the price of stock A is falling steadily, and an operator is aiming to promote it.
They will send unsolicited stock tips via social media, calls and text messages to induce unsuspecting investors to buy it.
Thereafter, the group will sell ownership of Stock A to such investors, which will boost the stock’s price and trade.
This whole process of unfairly inflating the price of a stock is known as the “pump and dump” scam. This is usually done through unsolicited stock tips.
Why are such tips a cause for concern for individual investors?
While experienced investors can simply ignore such tips, many beginners and uninformed investors fall prey to scams by acting on these tips.
Usually, these tips advise the receiver to take actions that may not be suitable for their portfolio, thus causing them many losses while trading.
How do these tipsters get our phone numbers?
There are two main sources from where these wrongdoers can get our phone numbers –
1. Telecom companies
Brokerage firms often work with telecom providers to connect with their clients.
When brokerage firms like Zerodha asked telcos to investigate, the departments responsible for handling these calls were found exposed to the leaks.
An SMS gateway is an online service that allows a user to send messages to multiple cellphones under a certain network. Major stock exchanges use such gateways to send bulk messages to the general public.
It is possible that these gateways may have been used by tipsters for “generation of numbers” as such services already have huge databases of phone numbers.
How to stop unwanted trading calls and messages?
TRAI DND (Do Not Disturb) feature is the most useful step to prevent unwanted stock tips and calls.
It is an initiative taken by Telecom Regulatory Authority of India (TRAI), which helps users to block all commercial spam messages and calls.
Simply send the text “START 0” to 1909 to register on DND.
You can also register for DND service by downloading TRAI’s phone application, called DND 2.0.
How to report unwanted calls and SMS?
It may happen that even after registering for DND, some tipsters may get access to your number and you may receive unwanted suggestions.
If it does, there are several steps you can take to report such numbers.
1. You can report the sender of the tip to TRAI by reporting on 1909 in the following format –
unsolicited stock tip, number from which you received it, date
For example, if you receive a tip on 15 January 2020 from the number 9123456789, you would send the following text to 1909 –
Unsolicited Stock Tip, 9123456789, 15/01/2020
2. You can report these suggestions on TRAI’s phone application – DND 2.0.
3. You may notify NSE of such communication by submitting a tip-off on its official website.
4. You can lodge an official complaint on SEBI’s Investor Redressal System, SCORS (SEBI Complaints Redressal System).
5. SEBI has also issued the following press release to inform the public about such stock tips –
“Curbing the misuse of SMS in large numbers in the securities market”, dated 18th August, 2017
‘SEBI cautions public on unsolicited calls/SMS’, dated 16th December, 2016
With such release, SEBI aims to inform investors, telecom services and brokerage firms about the harmful effects of such tips and the actions to be taken to redress the issue.
Unsolicited stock tips adversely affect investors and traders and proper precautions need to be taken against them.
With the help of stock market executives, we can take proactive steps to ensure that our portfolios are protected from such malpractices.