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A forex trading scam is a scheme that tries to trick you by giving you money in the forex market. Scammers promise you to give high returns or guarantee profits. But this is unrealistic.
This guide helps you to learn about spotting the warning signs of a forex scam, verify a broker’s legitimacy, and act if you suspect a scam.
Quick Insights
Avoid unregulated brokers. Before you invest, verify their regulations with a reputable agency.
Search for their website and regulatory agency, customer service, and reviews to verify the broker is legit.
Collect any proof, report it to the FTC/police, check your insurance coverage, and see the ways to get your money back.
How to spot a forex scammer online? Forex trading can be a good trading experience, but unfortunately, there are scammers to trick you and steal your money. Be aware of these red flags to avoid falling victim to their schemes.
By following these steps, you will better be equipped to identify and avoid forex scams. Always do research before investing your hard-earned money.
Is the forex market a scam? The forex market is a legitimate market where people buy and sell currencies around the world. There are a lot of scammers who try to trick investors. However, there are many red flags with it, so it’s crucial to be aware of them before you invest.
How to check if a forex broker is licensed? To check if a forex broker is licensed, the following things to follow.
Scammers do not create high-quality websites to mislead investors. Trustworthy websites must have information about legal, contact, and background information, risks involved, and regulatory body affiliation.
Legal information should contain trading information and tax policies. Background information must have a record of at least 5 years of details of profit and loss. Contact information must be there on the website if it is missing, be cautious before investing.
Visit the website’s “About Us” section that explains the company’s background and a “Contact Us” section with multiple ways to reach them. Also, check the disclaimer section for information about the regulatory body they are licensed with.
Before you select a forex broker, it is mandatory to verify whether the broker is regulated or not. Using the search tool, see the legal name of the forex company.
Find the list of reputable forex agencies in the broker region. Finally, see the website of the regulatory agency and the broker license details using that legal name.
When a broker is promising guaranteed immediate or high returns, they are not a legitimate broker. If the broker is a Security Investment Protection Corporation (SIPC) member, your investment is safe.
If the broker goes out of business, your investment money is protected against losses from the forex market. Before you invest your money, you need to check the below points:
The legitimate broker must have a good responsive customer service team that can assist investors with any issues. The support is available 24/7 and can be available via email, live chat, and phone. Some forex brokers might not offer 24/7 customer service due to time zones.
The foreign exchange broker should also have an educational resource, research tools, trading platforms, and FAQ sections that can help traders improve their trading skills. Scammers do not have good customer support. Avoid brokers with poor support teams, as it denotes fraudulent brokers.
One of the best ways to find a legitimate broker is by looking at the customer review. You can find genuine reviews from websites and forums. After seeing their customer’s reviews, you can find out whether they are legitimate or not.
Positive feedback represents trustworthy brokers whereas negative review shows fraudulent scammers.
While avoiding scams, the above things are followed before you invest your money into the trading system.
Tracking a forex scammer is difficult, and recovering lost funds can be challenging, depending on various factors. The below steps to follow for tracking a forex scammer.
Scammers are good at staying hidden. Initially, you gather more information about the scammers. This will help you to track down the scammers easily. Keep all the scammer chats and any other information that helps to recover who the scammer is really and where they are.
The other information that should be collected from the scammers is listed below:
People detector sites and phone number searches will not help to catch scammers. In these scammers often use tactics to trick you and steal your information. Save your money and avoid them.
If someone steals your information and uses it to open accounts in your name. Raise a complaint to the FTC for identity theft. It is very helpful in fighting fraudulent charges or closing accounts opened in your name.
For raising a complaint, provide proof of identity such as driver’s license number, full name, and social security number. After filing a complaint against scammers, you will receive a recovery guide. FTC investigations help to recover your money back.
To recover your money back, you can also file a complaint to police law enforcement. To file a complaint with the police, you must have the following documents.
The next step is to report the online scammers to the platform in which you have been scammed. It is also helpful for other investors to fall in the same direction. This will not help to claim your money. It creates awareness among the other investors.
The platforms you were contacted are listed below:
Some insurance policies help you to recover your money, because of identity theft or scam. It is best to check with your existing insurance policies to see if they cover this.
Identity theft such as lawyer fees, stolen funds, lost wages, replacing stolen documents, postage, and notary fees. Check whether the insurance is fully or partially covered, you keep track of your time and cost spent.
If you have lost funds to a scammer, try to recover those funds depending on the payment methods you choose. Recovering lost funds can be difficult, especially for methods like wire transfers or cryptocurrency.
If you are a victim of a scam, there is a 50% chance that you will get scammed again. By following these steps, you can increase your chances of recovering lost funds and help prevent others from falling victim.
By following these steps, you have gained the knowledge to navigate the forex market with confidence. You can now identify red flags, verify a broker’s legitimacy, and act if you suspect a scam. Do research and take your time learning the guidelines of a trading platform.
Interacting with secure platforms and reputable regulatory bodies can significantly enhance your protection. Start trading with forex safely!
Pro Tip
Learn the signs of forex fraud and protect your money. Start trading with confidence. Stay informed about CFDs, forex, stocks, and cryptocurrencies. Find a trusted forex broker with our comparison guides.
If you have been scammed by a forex broker, to report a forex scammer online, contact FCA at 0800 111 6768 or use the contact form.
To spot the forex scam and protect your money, check the red flags associated with it.
To trade without being scammed by the broker, consider the below listed things:
Forex trading may be risky. So, avoid any broker promising guaranteed returns in a short period. The brokers who offer the necessary tools and guidance for online trading can be trustworthy.
To check the broker’s legitimacy, first, you need to check the websites, confirm the regulatory agencies, research online reviews, and look for SIPC membership.
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