Different types of Forex scams

Forex is a foreign exchange market. Simply put, Forex trading is speculating on currency movements by buying one currency and selling another at the same time. The value of currencies rise and fall against each other due to a number of economic, geopolitical and technical factors.

It is the world's largest financial market that operates 24 hours a day. It should be noted that the Forex market is decentralized, which means, among other things, that the market is not controlled or supervised by a single organization or institution, but rather by regulators or authorities in different regions. The lack of regulation means that the market is subject to constant fluctuations, making it a risky investment. Since Forex is a huge gold mine, some companies try to lure unsuspecting customers to lose their money and enrich themselves. Therefore, DGCCRF, AMF and ACPR warn about the risks associated with financial scams and urge investors to exercise utmost caution.

Types of Forex scams

Sites offering false promises

The first risk of fraud comes from websites offering Forex trading. Many Internet users come across advertisements extolling the virtues of Forex, which allows them to become very rich in a short period of time and without much investment. To attract victims, the sites inflate their offers and make false promises, such as "multiply your money by 30 in one click". All it takes is a naive person or someone simply interested in trading to be seduced. The consequences are dramatic: Speculation on illusory gains, misappropriation of funds and loss of investment.

Influencers

Influencers make similar offers on social media platforms like Instagram or Snapchat. Their goal is to introduce unsuspecting people to online scammers. Future victims are offered to register on a trading platform and make a deposit. After that, they will be under the control of the fraudulent scheme. Of course, the agents of influence do not act gratuitously, but receive a salary from "scam brokers" at the expense of embezzled funds.

Brokers

The worst thing about Forex scams is that they can be realized by some brokers. In fact, depending on the type of broker and the risk management adopted by him, the broker may find himself in a situation of conflict of interest with the client and receive his losses. This is especially true if he takes speculative positions rather than hedging them as he should.

Use of personal data

In addition, personal data entered when registering online can be used by fraudsters when trading Forex. After all, people enter data, especially about means of payment, which can be easily forged. Therefore, it is possible to lose money based on this information. Therefore, you should check the reliability of both the website and the online broker before choosing the latter.

Trading robots

A trading robot is an automatic program that works 24 hours a day, which places orders according to the program code embedded in it. It is designed to make investment decisions, taking the place of the trader to optimize trades: It trades, buys and sells currencies at a very high speed. It is important to remember that any robot's work involves a certain level of risk. When you deposit your money on the platform, you entrust it to the robot, which becomes its master. Some of them are capable of making you lose your money in case of unfavorable market conditions.

Agitation

At the same time, scammers use persistent agitation and enticing sales techniques to encourage you to invest more and more. They again offer you enticing results and "very little or no risk", while presenting themselves as highly professional experts. It is worth remembering that telephone solicitation by individuals for financial products is illegal in European countries. If you are approached by a broker over the phone, know that it is a scam. In short, be on your guard and beware of unrealistic promises.

Double Fraud

As scammers perfected their schemes, they came up with "double fraud." This is a double punishment for victims who have already been scammed once. Fake professionals, such as fake banks and law firms, make them believe they can recover lost funds. For example, scammers claiming to be authorized by an authority offer people to reimburse all or part of their losses on malicious websites. In reality, they will misappropriate their funds a second time. This scam will lead to more losses.

Signs of a trading scam

First, if SPAM emails ask you for personal information such as a phone number or bank account, this is a serious sign of a scam. Make sure you don't give your contact information to anyone you don't trust completely. Also, we strongly advise you to stay away from opportunities that sound fantastic. Don't fool yourself into thinking that making money with a 20% return per month is easy.

Also keep in mind that if you are offered a deposit bonus or even a no deposit bonus, it is a scam. Obviously, these people promising you miracles are clearly interested in doing so.

Finally, we advise you to do a quick check of the broker or fund manager online to make sure the company is legitimate. If you can't find any information, or the person refuses to provide you with basic information, it is most likely a scam. So be vigilant when investing in Forex and beware of fraud at the first sign of it. First of all, check that the trading site is not on a blacklist maintained by the AMF. Then make a note of all information regarding your investment so that you can file a complaint or go to court if necessary.