Beware of Forex Scams
Whenever there is an opportunity to make large sums of money, especially when it can be achieved quickly and with minimal physical exertion, there is going to be people who are eager to dive right in. Whenever there are people eager to get rich quick with minimal effort on their part, there are fraudsters ready and waiting to swindle them out of their money.
Experienced traders are experienced enough to avoid forex scams. It’s the new traders who are preyed upon and are most vulnerable to the many forex trading scams that are all over Facebook and other social media platforms.
The U.S. CFTC (Commodity Futures Trading Commission), which regulates futures and commodities trading as well as other national regulators like the Financial Conduct Authority (FCA) in the UK regularly warn new investors to be cautious of frauds and scams. The main thing to look out for is the promise of huge gains from your investments, whether it’s related to Forex or not, if it’s too good to be true, it often is. Regulators often issue several consumer alerts in connection with foreign currency trading scams. Most financial watchdogs offer the following tips to help traders avoid being scammed.
Be sceptical of high-profit-low-risk offers
“I made $5700 in five minutes!” Ads, emails or salespeople that promise high returns on small investments with little or no risk are tempting, but they are quite simply bait. The fact is that while there are large profits to be made in the forex market, massive losses are waiting for you if and when you make a mistake. Most novice traders quit trading within a year because they can’t handle the risk.
Always be suspicious
Before you hand over a single penny, thoroughly check the company you’re planning to do business with or the service you’re going to use. Check your country’s financial service regulator to see if that company is listed on its consumer fraud alert page. Check to see if the company is registered with any financial services authority. Check if there’s been any disciplinary action against the firm or company. Go even further and get a valid address and telephone number to verify that it belongs to the company. Also, check to see the person you’re in contact with actually works for the company, especially if you’re doing business online.
Beware of high-pressure sales tactics
Representatives of legitimate Forex brokers won’t contact you with unsolicited emails nor with they pressure you into opening an account with them, that is against regulations if someone is pushing you to invest right now because there is an opportunity in the market that you can’t afford to miss; their lying. There are dozens of killer trades in the forex market every day; you’re not missing out on anything. A decent broker will be more concerned with retaining you as a customer for as long as possible. A good broker should be patient while you review them carefully and make sure you’re ready to invest. A con artist can’t afford the luxury of waiting; they need you to take the bait.
Be careful when sending money over the internet
The internet has made it very easy for scammers to operate. It only costs a few dollars a month to have a professional-looking web site hosted. Before you part with credit card details or make a wire transfer, make sure to check out the company thoroughly.