Robinhood, founded in Palo Alto, California, in 2014, began as a brainchild of two Stanford students and now offers commission-free trading services to everyday people. On the platform, you can trade stocks, options, ETFs, and cryptocurrencies. At this time, Robinhood doesn’t offer mutual funds, bonds, or retirement accounts, but it’s easy to get started, and customers can enjoy a $0 starting balance.
Customers can trade using the Robinhood website or the app. Even though Robinhood has been criticized by financial regulators and even fined, the platform itself is not a scam. Robinhood is a legitimate trading platform that provides open access to the markets. However, because of its popularity, scammers have found ways to defraud customers. Here are some of the scams they use to attack unsuspecting traders.
The most common kind of scam used to target Robinhood users is phishing. Phishing hackers try to get your login credentials by pretending to be someone else or represent a trustworthy company, such as Robinhood.
Scammers may try sending you an email that appears to come from Robinhood. In many cases, they may attempt to make the sender’s address look similar to Robinhood.com. For example, a scammer may send you an email with one of the following domains:
While these are close, they differ from the actual domain, which is “Robinhood.com.”
Within the email, you may see a link to a website that looks legitimate but it’s designed to steal your login credentials. If you enter your username and password, they are sent to a hacker who can use them to access your account or sell them to another hacker.
The hacker may ask for your personal information or login credentials for Robinhood or other trading services or platforms. This is then used to steal your money, or it may be sold off to another hacker. They may also ask you to download software that ends up containing malware.
The email may also contain attachments that seem innocent, such as those claiming to be 1099 tax documents or other crucial files. But if you were to click on the attachment, your computer could be infected with malware.
You may also get an email that promises a prize or a gift, such as free stock. These are often too good to be true and designed to trick you into clicking on them to investigate the “opportunity.” When you click, you’re either brought to a site set up by a hacker to steal any information you enter, or malware gets downloaded onto your device.
Scammers may also send you text messages that sound like they could be from Robinhood. These messages may request your account name and password so a hacker can use these to log in to your Robinhood account. The hacker may also hope that you use the same username and password combination on other financial accounts and use them to log in and steal your money.
Scammers also send text messages requesting two-factor authentication (2FA) codes or passwords for accounts. If you provide the 2FA code, it goes to a hacker who can use it to access your Robinhood account.
When a hacker asks for your password, it may be because they already have your username and just need the password to take their hack to the next step. If you have 2FA enabled, they may follow up with a request or your 2FA code as well.
To beat Robinhood scams, you should:
It’s also essential to download the real Robinhood app from the Apple App or Google Play store. When you need to download tax forms or other items, only do so from within Robinhood.com. You should also only try to get phone support by logging in to Robinhood and asking for a callback.
Robinhood also encrypts your account password and other sensitive information, such as your Social Security number. This means even if a hacker were to gain access to Robinhood’s database of information, they wouldn’t be able to read your sensitive info.
In addition, when you use Robinhood’s app, all communications are transmitted using Transport Layer Security (TLS), which encrypts the information, making it impossible for anyone without a decryption key to read. Robinhood employees also never access your banking information after you have entered it.
Robinhood has a team in charge of fighting scams. If you think someone may be trying to scam you via email, text message, or any other means, you should report it to [email protected]. You should include any and all information, such as the email header, screenshots of text messages, or addresses and names of websites or social media accounts.
To stay safe, you should periodically review the devices that have accessed your account. You can do this by navigating to Account > Settings > Your Devices. If you no longer use a device, you should remove it.
If you notice strange activity, you should change your password right away and always use no less than ten characters with uppercase and lowercase letters, symbols, and numbers. Your password should also be unique to Robinhood.
To keep your account secure, you should enable 2FA by using either an authentication app or text messages.
If any account activity or messages your receive seem suspicious, you should reach out to Robinhood right away. They may be able to help you secure your account and stop a hacker from taking advantage of you.
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