Many people feel tempted to grab the opportunity to increase their capital by trying their luck in the forex market. It seems that huge riches await people and all they need to do is conduct a quick research and make the opportune move. Unfortunately, this very promise is the hook which enables scam artists to thrive in this area.
It’s important to note that forex trading is a legitimate form of doing business and many professionals practice it. It implies various ways of buying, selling, and exchanging pairs of currencies. With trillions of US$ being exchanged on daily bases, forex trading is a huge frontier for financial gain and opportunity. Still, it’s not just the vast cash flow which makes the forex market so appealing.
The market is highly volatile since it doesn’t have regulated centralized exchange. Topped with the fact that forex trading is a high leverage market, it’s no wonder why so many come to the conclusion that forex (FX) is an excellent opportunity for getting rich. Additionally, the FX market is highly available. The exchange is done through computer networks and a click of a button. Likewise, trading is available 24 hours a day, 5 days a week. The opportunity for gains awaits any time of day.
What is a Forex Scam?
Owing to the nature of the FX market it has become a fertile ground for various types of scams. Unfortunately, forex fraud is a growing problem which comes in various forms. Typical examples would be boiler room scam artists, faux-experts who chat you up in a coffee shop, and presenters of revolutionary software. Furthermore, there have been cases with trusted brokers and executives who have been involved in forex scams.
Though there is no guaranteed way to avoid forex fraud, it is still possible to trade and minimize the chance of becoming a victim of a forex scam. You can prosper in the forex market providing you remain diligent and careful with every decision you make. Don’t let your valuable assets vanish as a result of a devious plot by forex scammers. Primarily, make sure the person you choose to do business with is duly regulated in the country they operate from.
Forex Scam Victims
The rule of the thumb is: The most common victims are the ones who think it will never happen to them. It is a misconception the targets are gullible elderly citizens. Generations older than their 50s have developed a competent level of computer literacy. This makes them more immune to potential online scams.
Nowadays with tactical affinity scams, everyone is a target for scammers. Unfortunately, this means you too. What’s more, young adults have become a growing target for online fraud. Social media like Facebook, Instagram, YouTube, and other platforms are an open field for scammers who prey on the young people who are the most likely to fall for get-rich-quick schemes. Even if these con artists employ rudimentary techniques which lack any kind of credibility, they are highly successful for numerous reasons.
What Can You Do in Case of a Scam?
Ask for professional help. If you have been a victim of a scam or you know someone who has experienced a financial loss in this way, don’t hesitate to take action. You shouldn’t feel shame as these cons are designed to entangle innocent people. However, in order to mitigate this awful experience take matters into your hands and ask for the assistance..
Our team of experts is at your disposal. Funds Recovery specialize in dealing with cases of money fraud, and we have vast experience with retrieving funds for our clients. As we have a large and growing number of satisfied customers, chances are we are already knowledgeable regarding your troubling experience with cons.
You have nothing to lose, but you can take back your money and pride. Contact us for a free consultation.
Ponzi and Pyramid Schemes
This is a very old and very common fraud that can build up to enormous proportions. People are drawn into a hierarchical structure with promises of high return for the initial investment paid in advance. On several occasions, early entry investors do get a moderate financial benefit. Consequently, they feel inspired to spread the success so they go on to encourage others to participate in the unsuspected scam.
However, this lucrative opportunity is just smoke and mirrors. Profit isn’t actually being generated, still, there is an illusion of it. The earlier investors are funded by the later entries of the scheme. Once the jig is up, the upper-level scammers call the whole thing off and disappear with everyone’s money.
If you want to read more about this type of fraud we have covered this type of scam in-depth under the Ponzi & Pyramid scams section.
High Yield Investment Programs
More often than not, High Yield Investment Programs (HYIP) end up being a Ponzi scheme. If it’s too good to be true, it is probably a scam. When it comes to the forex market, these systems offer great return opportunities for a modest contribution to a FX fund. Like with any pyramid scheme, primary investors receive the income generated by the payments of newly initiated members. Eventually, once there are no more investors in the chain, the top-cats close everything and take all the money.
In a standard trade of goods, there’s always the asking price and a bidding price for a single asset. The difference between these two numbers is the bid-ask spread. In the case of currency pairs, these spreads tend to vary. With the lack of a centralized exchange rate, individuals can abuse this system by offering wide and problematic point spreads. In most cases, it is a red flag when brokers offer considerably different point spreads.
A typical warning sign would be brokers advertising exchange ratios with pips going up to 7 or higher. In case you’re wondering, pip is the smallest price move and most commonly it is the rightmost decimal in the figure presenting the exchange rate value. In these cases fraudulent and malicious brokers can falsify and manipulate numbers more easily, resulting in their gains but your money loss.
“Robot” Scamming in Today’s Market
Wouldn’t you like to have an app that can garner profit even while you’re sleeping? Well, who wouldn’t! We live in the age of constant inventions and revolutionary technology performing miracles. That’s why it seems reasonable that a wondrous new finance software could be just around the corner. It’s easy to get enticed by the possibility of owning a state-of-the-art program which can turn you rich without any effort from your side.
As wonderful as it sounds, this almost never works. ‘Robot’ scamming doesn’t necessarily
employ robots, but it alludes to the idea that a program can automatically get us rich. Financial software is simply a tool that can help you form a decision but without proper expertise, it tends to be useless. Of course, many of these new programs are untested and it’s difficult to check if they work or they are simply a hoax.
Scammers will try to sell such phony prediction programs for a lot of money. They might even ask for a monthly subscription for the right to use it. Unfortunately, the problem with this scam might not stop there. Many of these programs end up being malware which extracts personal and financial data from target’s electronics.
This type of fraud revolves around people who present themselves as great experts. These financial mavericks will gladly use their classified knowledge and insights to make you rich. They can come in various forms like account management companies, retail firms, asset managers, illegitimate brokers, and traders. They offer their services for a fee and they promise to provide you with a tip for an opportune moment when to strike the forex market. It’s difficult to discern real professionals from these phony experts. To make things worse they will boast with success stories and testimonies, so it’s easy to fall for their once-in-a-life-time offers.