Forex scams are increasingly sophisticated and hard to detect, which is why it is vital for traders to keep records of everything. This includes saving all correspondence and evidence to prove the legitimacy of any transaction. Eleni Toumbi, a Cyprus-based lawyer with the Michael Chambers & Co. LLC Advocates & Legal Consultants, explained the most common tactics used by scammers.
Scammers use a variety of methods to entice unwary Forex traders. One common strategy is to make an offer for a robot and then wait for a week or two to see whether or not it works. However, this approach isn’t foolproof. Ultimately, you should not rely on any automated system to trade for you. While computers can be effective at making trades, they’re not mistake-proof, and no one can predict market movement with 100 percent accuracy. The risk of being scammed by a robot is very real, and this is why you should research a trading system thoroughly before you invest in it.
One way to avoid falling victim to a scam is to make sure you read the testimonials of any Forex robot developer before you buy one. Look for clear contact details and an address. If the developer is anonymous, you’re probably on the receiving end of a scam.
False single sellers
Traders should be wary of forex scams that promise high returns. The scammers use a variety of tactics to lure people into their investment schemes. They will often promise bonuses or discounts to attract investors. Scammers also use social media to advertise their investment schemes. They will sometimes use images of luxury items to attract investors.
Scammers usually operate from one bank account. They will use money from their clients to finance their operations. It is vital to be wary of this as you might lose your money to the scammer.
False fund managers
The common hallmark of a forex scam is an exaggerated claim of massive returns. Such claims can never be guaranteed. The volatile nature of the forex market means that there is always some level of risk associated with investing. Nevertheless, companies that make such promises are highly likely to be scams.
These scammers will contact you in a variety of ways. One of the most common is through cold calling. They will insist on immediate payment and will often speak about the high qualifications of their managers. They will also use excel tables to verify their profitability claims.
One of the first signs of a forex scam is a business offering unrealistic returns. This is a classic sign of a scam and should be looked out for. It is possible for a forex trader to make an investment that promises a 7-point spread, but this is a red flag and should be avoided. The market is unpredictable, and returns may vary depending on the volatility of the currency pair.
Another warning sign of a forex scam is a large bid-ask spread. These brokers will offer traders very high spreads on certain currency pairs, which is completely unreal and cancels out any profit potential. While there are financial bodies that issue strict regulations on spreads, plenty of brokers do not comply with these regulations.
Traders must be aware of the warning signs of a forex scam before they open an account. First of all, they should avoid brokers who make unrealistic claims, such as high returns or high success rates. Moreover, they should avoid Forex brokers who advertise themselves with extravagant ads, such as those featuring big cars and high salaries.
Forex scams use many different techniques to target their victims. Some use cold calling. They insist on payment right away and mention the high qualifications of their managers. Some even sell systems at exorbitant prices, promising high investment returns.
If you have lost money through a forex scam, it may be possible to recover those funds. There are several ways to do this. The first step is to contact the appropriate authority in your country. Typically, this would be the financial regulator. You may also want to share your experience with the forex trading community, to help prevent future scams.
Some individuals will choose to take legal action to try to recover their funds. In some cases, this can be quite difficult. But if you do it right, you can get at least a portion of your money back. In order to do that, you will need to report the scammers to the judicial authorities. These authorities can intervene and freeze your funds if they discover that they are not operating legally. You may also be eligible for compensation from the Investor Compensation Fund, which can help you in such a situation.