As Forex markets promise to give you an amazing return on investment , they became extremely popular in the last few years. There are quite a few variations of the Forex scam. Feel free to add names of questionable Forex platforms in the Comments section, at the bottom of the article.
According to the specialists at InvestorGuide. Forex scams draw customers in with sophisticated advertisements placed in the newspaper, heard on the radio, or seen on internet websites. Forex promoters often lure investors into scams with various assurances, including their ability to predict an increase in currency prices and claims of high returns with low risk.
An unregulated financial company trading off-exchange Forex, foreign currency futures and options contracts with retail customers is illicit and may be a fraud or scam. In many cases, investors may be guaranteed high returns in the tens of thousands of dollars over a few weeks or months, with a relatively low initial investment. Watch the video below see a few extra tips from a victim, talking about forex scams, training courses, and hedge funds.
How does this scam work? The point spreads differ widely among brokers and differ between currency pairs. Today, it is unusual to find a broker that claims he takes a commission.
He is still making his money from the difference in the spread but spreads are now regulated and only smaller spreads are permitted.
Great explanation by DailyForex. In law, commingling is a breach of trust in which a fiduciary mixes funds that he holds in the care of a client with his own funds, making it difficult to determine which funds belong to the fiduciary and which belong to the client. When it comes to the Forex scam, the same team at DailyForex. The broker benefits financially during the trading and eventually disappears with a customer's money.
If a broker won't allow the withdrawal of monies from investor accounts or if problems exist within the trading station, the trader should take immediate notice. Additionally, guarantees of high performance levels-some much higher than those offered by other Forex brokers-should be viewed with considerable skepticism. This is an increasing scam especially with the advancement of the technology.
Questionable brokers sell automatic trading systems which claim to generate automatic trades even when the trader is sleeping. All kinds of HYIP funds have been notoriously showing up everywhere. Simply because they work; for the scammers! The concept that sells this Ponzi scheme is that the investors of yesterday get paid back by the investors of tomorrow. How the scam works is that once the fund runs out of prospects, it closes down and takes whatever money it has with it. Little do you know that not only you are lose your money, but they do not even offer you anything that will help improve your trading!
There are many red flags you should be aware of. The first one would be when you are guaranteed a profit. There are no guarantee profits in Forex. Use your computer and search reviews featuring the broker, or the system, or the signal seller. Make sure the testimonials are genuine and do not come from their own websites. Check their website very carefully. If anybody would own that, why would they sell it? Make your family and friends aware of this scam by sharing it on social media using the buttons provided.
You can also officially report the scammers to the Federal Trade Commission using the link below:. If you want to be the first to find out the most notorious scams every week, feel free to subscribe to the Scam Detector newsletter here.
You'll receive periodical emails and we promise not to spam. Last but not least, use the Comments section below to expose other scammers. Binary Options Trading Scam. Sell My Structured Settlement Fraud.
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Protect yourself and your assets. Read the full story at leaprate. I recently recovered funds from two scam brokers, BeeOptions and Porter Finance.More...