Forex scammers control nearly 67% of trading platforms. According to the CFTC, 2 out of 3 traders lose money to a scam trading platform. As I stated in this post, this high fraud rate is one of the reasons many people assume that forex trading is a scam.
While there are very many fraudsters in this industry, Forex itself isn’t a scam. It’s a credible, highly liquid financial market where almost 7 billion US dollars are transacted daily. This means there’s so much money to be made in this market if you remove the element of scam. In this article, I’ll dive deep into forex scammers, including the common tactics they use to lure you into a trap.
Who Are Forex Scammers?
Forex scammers are internet fraudsters who deceive investors with fake forex trading opportunities. They create fraudulent websites or platforms, luring investors to open trading accounts, fund them, and then vanish with the money. Many of those trading platforms appear professional. However, beneath the facade lies an intricate web of deceptive practices.
For example, you wouldn’t suspect that the following websites are run by forex scammers at first glance:
- Golden Capital FX(goldencapitalfx.com).
- Digital Finance(digitalfinance.live).
- CFD Prop Firm(cfdpropfirm.com).
- HalkBit(halkbit.com).
- Momentum Pro Capitals(momentumprocap.co/de).
The sites look quite professional with credible-looking offerings. Some of them even display seemingly credible regulatory details and client testimonials:
What Tactics Do Forex Scammers Use To Lure Investors Into a Trap?
Forex fraudsters use a wide variety of tactics to get your money. The good news is that understanding these tactics enables you to counter them head-on.
1. Unrealistic Profit Guarantees
Fake brokers promise high returns with little to no risk. They do this in various ways, such as:
- Claiming to give you access to an automated trading robot with high trading success rates.
- Touting copy trading opportunities from so-called expert traders with vast experience and high success rates.
For those who are gullible, it’s easy to fall for these promises and fund your account, hoping the so-called trading robot will make money for you while you sit back and do nothing. Similarly, you might be encouraged to deposit money to copy “successful traders’ strategies and make profits.” But the reality is, once you fund your account, you’ve already fallen into a financial trap.
2. Some Forex Scammers Now List Fictitious Regulatory Details
As the public continues to grow aware of scam brokers’ deceptive tactics, these online fraudsters continue to devise new ways to deceive people. They are always one step ahead of the game.
Scammers know that the first thing many potential investors check for is if the platform is licensed and regulated or not. Hence they have created fake regulatory entities to associate bogus regulations with. A good example of a fictitious regulatory body is the so-called ‘International Brokerage Act’ listed by a scam broker called “Xeodis Precision Trading(xeodis.com)”.
Check out a comprehensive list of fictitious regulators on this page. Any trading platform that claims to be licensed and overseen by any one of these entities is a significant red flag.
3. Fake Testimonials and Reviews
Scammers now work with unscrupulous bloggers and authors to write positive reviews of fraudulent trading platforms.
Personally, I’ve received requests to write such reviews even though I am a person of high integrity and would never compromise my values for money. So I do the reverse—expose the platform. Here’s the evidence:
The fraudulent trading platform that this guy was asking me to write about positively is called Ollyn Investment PTE Ltd(ollyninvestmentlimited.com). Instead, I exposed it for what it is—a scam, and you can check out the review by going to this page.
You should not trust any broker just because you’ve seen a positive review of it somewhere or because the website displays client testimonials. Positive reviews and client testimonials can sometimes be deceptive especially if written with unscrupulous authors full of bias.
Be sure to check whether it’s regulated or not, keeping in mind that unregulated brokers are a huge redflag.
4. High-Pressure Sales Tactics
The CFTC lists high-pressure sales tactics as one of the signs of a possible forex scam. The motive behind these deceptive tactics is to get you to deposit money quickly, leaving you with no time to research and learn the truth. A forex scammer can show high-pressure sales tactics in many ways, including:
- Sending you a message such as the following, through email, social media, or telephone, “Here are today’s profitable buy/sell signals. Fund your account and grab the profitable opportunities before they are gone.”
- Displaying a false activity feeds about successful live trades. These feeds are fabricated to show profits made by other traders that are, in reality, false, such as “Errolle just made $4,000 three minutes ago.”
Where Are Forex Scammers Most Common?
While these internet scammers can operate from literally any country, the following countries have recorded high numbers of them due to:
- Lax regulations.
- More target victims with higher spending power.
- Increased internet accessibility.
- High unemployment rates.
Here are the countries:
- Russia
- Cyprus
- Nigeria
- China
- South Africa
- St Vincent and the Grenadines(SVG)
- Brazil
- Venezuela
- Seychelles
- The Republic of Comoros
- Australia
- India
How to Protect Yourself from Forex Scammers
Go to my recent blog post on that very topic.
Final Thoughts
Forex scammers continue to grow in numbers, launching dubious trading platforms day by day. Consequently, there are now more scam trading platforms than legitimate ones, leading many to believe that forex is a scam whe, in reality, it’s not.
These online criminals have continued to devise new deceptive tactics day by day, remaining a step ahead of the game. But the good news is that being familiar with these tactics(including the latest ones) can significantly reduce your chances of falling victim as a trader.
The tactics highlighted above are just a few of the many that lots of traders are still unaware of. If you found this information helpful, don’t forget to share it with others to help spread the word and keep the internet safe.
Report A Forex Scammer
Have you lost money to a fraudulent broker? Go to this page, or email scamread@scamreader.info to report the incident and seek help.
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