Anyone with even the slightest interest in trading is familiar with the words “forex” and with cryptocurrencies. Although stocks are popular, forex outstrips all other markets for the sheer amount of money that passes through exchanges daily. Unfortunately, this has also given rise to forex scams.
The scale of the forex trading scam problem matches the size of the market. It is estimated that $5 trillion in foreign exchange is traded each day. The forex trading scams take advantage of the popularity of forex and fools people into thinking they are making actual trades when the broker is simply pocketing the money.
Those who fall victim to forex scams need to seek funds recovery. Trader Defense Advisory experts are experienced in dealing with all types of scams, particularly forex scams, and can help you seek redress for your claims. We provide consultation, intelligence reports, funds recovery services, and advocacy through every phase of your claim. Contact our professionals today.
The Scale of the Forex Scam Problem
As the popularity of trading forex online grows, fraudulent parties are casting a wide net to catch people who are looking for real trading opportunities. These people are not necessarily gullible. Many are professionals from all walks of life. The problem is that scammers have become more sophisticated at constructing a veneer of legitimacy.
The problem has reached global proportions and just as there are drug cartels and international crime rings for other offenses, there are also huge foex scam networks involving agents from various countries targeting thousands of investors and traders.
In 2021, German police raided call centers in run by 23 suspects in Kosovo, Bulgaria and Berlin. These call centers were centers of operation for fake crypto forex and CFD trading websites. The fake platforms were powered by technology by Israel-based Leverate and Airsoft.
These suspects were accused of running over a dozen CFD, crypto, and forex trading scam websites that targeted European investors and robbed millions of euros. The sites applied the same methodology. Basically, they would advertise trading for a popular product like crypto, CFDs, and Forex, and crypto and persuade people to trade with them. Many of these sites looked legitimate and were, therefore, able to trick many traders.
The forex scams provided traders with a fake platform that supposedly allowed them to track their trades, when in reality, no trading was taking place. The fake broker simply pocketed the money and claimed that the traders lost their investment. Since forex is volatile, moves quickly, and is a challenge to track, it was relatively easy to persuade traders that they lost money.
If they did have any money in their account, the traders experienced forex withdrawal problems. The brokers would not release their funds without huge fees or would invent rules that funds could only be released after a certain amount has been traded. In some forex trading scams, the broker would disappear, which creates a special challenge for fund recovery.
Learning from high-profile forex trading scams can help you avoid falling victim to them. Here are some signs for forex trading scams
- Unregulated Broker
The number one factor when choosing a broker is to confirm that it is regulated. Not only should a broker have a license, but it should be licensed by a top-tier regulator that has high standards and a high degree of oversight.
Trader Defense Advisory works with many clients who have been cheated of their funds in forex scams. Most of these scam brokers are not regulated. In rare cases, a licensed broker can cause clients problems, but these can be resolved if there is a regulator to negotiate with.
- Offers Only Its Own Platform
Not every broker that offers only their own platform is a forex trading scam, but if there are other red flags, such as no license, it should cause concern. Having their own platform can give brokers control over trading or the ability to present fake trades.
These scams mentioned above worked on fraudulent platforms. A broker who offers MetaTrader or other choices shows some degree of openness. It is understandable why a scam forex broker would want to limit clients to only their own platform.
- Aggressive Manner
If a broker is aggressive about pressuring you what to trade, that is never a good sign. A broker is meant to advise you, but to try to convince clients to make trades they do not want to make is a sign that the broker is working in his or her own interest and not the clients.
One thing to watch is the pump and dump strategy. A broker may have undervalued assets and encourage clients to buy them to bring the value up. When this happens, the fake broker will sell their holdings which will devalue their clients’ trades.
- Lack of Transparency about Fees and Procedures
A legitimate broker has all fees and procedures clearly written on the site or in their terms and conditions list. If the broker does not answer questions about these basic and important matters, that may be a sign of forex scams.
- Will Not Release Funds
Forex withdrawal problems are the main indication of a forex scam. However, people do not discover this problem until it is too late and the broker has their funds in their control. People may be told they made money and when they ask to withdraw funds, the broker will either charge a high fee, cite a fake rule that withdrawal is only allowed under certain conditions or disappear.
If you are dealing with any of the issues above, your money may be in the control of a forex trading scam. It is important to demand the broker release your funds. If there are forex withdrawal problems, seek the aid and guidance of fund recovery experts at Trader Defense Advisory
Have You Lost Money Because of a Forex Scam? Talk to TDA Experts Today
If you have been the target of a forex scam contact Trader Defense Advisory. Our team of experts has vast combined experience dealing with corona refund scams and advocates for our clients. Consult with us and we will create a claim and help you get started on the path to retrieving your funds.