The Unregulated Forex Broker
Who They Are
An unregulated broker is one that is not licensed by any government body. They are the most dangerous forex trading scam out there.
How They Operate
For this scam to succeed, the unregulated broker hopes you will be too distracted by the promises of bonuses, that you will forget to verify if their license is authentic.
In an unregulated broker scam, the perpetrators will build a professional looking website and even develop a mobile app for trading.
However when you check the website for their license number, you will find out they don’t have one.
Some of them will try to cover up for their lack of a license number, by claiming to be affiliated with a legit forex broker.
Red Flags
- Ensuring your stop loss is always triggered
- Offering bonuses with unattainable withdrawal conditions
- Widening the spread unnecessarily
- Reversing your profits
- Increasing the minimum withdrawal amount to prevent you from withdrawing
How To Avoid
To avoid falling for an unregulated broker, always verify their license information from the regulator who issued the license.
The Fake Forex Guru
Who They Are
A fake forex guru is someone who opens a social media profile (usually on Instagram, TikTok, etc.) & claims to be an expert at trading forex; but rather focuses on showing off a flashy lifestyle.
How They Operate
For this scam to succeed, the scammer posts pictures/videos of himself driving luxury cars & hopes you will trust him enough to send him money to trade for you.
I mean, if he drives a Lamborghini, he can’t certainly steal $100 from you right? Well, wrong! as many of those cars are just rented.
These fake forex gurus will sometimes recommend a scam broker to their followers or give them a link to register with a scam broker who will compensate them.
They hardly conduct forex training or educate their followers on the risks of trading; instead, their focus is always on portraying a luxurious lifestyle.
Most forex gurus are more like contractors/influencers who earn commissions when they refer clients to a scam forex broker.
Red Flags
- Flashy cars
- Displays of money
- You never see them trade live
- Motivational speeches
How To Avoid
Don’t take trading advice from people who flaunt wealth. Real traders don’t show off & are always talking about risk & education.
The Forex Signal Seller
Who They Are
Fake signal sellers have taken to using the Telegram & other social media channels to create groups where they sell their so called signals.
We have to be careful here because some real traders also have signal channels on Telegram.
However, the difference is that the scammers sell their signals as opposed to offering it for free.
Because they want you to pay for the signal, they market it as a magic formula with an 85% to 90% win rate
How They Operate
For this scam to succeed, the scammer hopes you will be too busy to analyze the market for yourself & so will depend on magic formulas.
The scammers simply copy signals from other channels and paste them on their own channel which you are subscribed to.
Forex signal scammers use the Telegram platform to sell forex signals to their subscribed members & many of these signals don’t work.
If they work by a stroke of luck, the scammer takes the credit & if they don’t work, the scammer blames you for not executing properly.
Forex signals are simply the result of someone else analyzing the market & telling you what to trade & when to trade it.
Red Flags
- Flashy cars
- Pretending to want to help you because they care
- Asking you to pay for the signal
- Too much time spent on taking pictures instead of trading
How To Avoid
To avoid fake signal sellers, learn to analyze the markets by yourself and not depend on magic formulas. Also never give money to anyone who flaunts wealth on social media.
Fake Trading Robots
Who They Are
Forex trading robot scammers are people who develop & sell trading robots with false claims of performance & efficiency.
How They Operate
For this scam to succeed, the scammer hopes you will fall for promises of high yield when their robots trade for you.
They basically build a robot, & market it through forex gurus, Telegram channels, WhatsApp groups etc.
They sell you the idea that the robot can work in all markets & using any account type etc. just so they can get as many people as possible to buy it.
But this is never the case, because robots are built for specific markets & trading conditions; and robots can also lose.
Again, when the robots make you a profit, the scammer takes the credit & when the robot causes you to lose, the scammer blames you for not setting it up correctly.
Red Flags
- Forex robot is sold on the black market
- Negative reviews from other users
- Robot is marketed with claims that it can work in all markets
- No demo account provided to test the robot
How To Avoid
To avoid this, only purchase robots from sellers with a verifiable track record & understand that past performance is not a guarantee of future results.
Can You Recover Money From A Forex Scam?
Yes, you can recover money from a forex scam but the chances of recovery are slim (around 10% chance of recovery).
However, if you have fallen victim to a forex scam here are some tips to recover your money:
Ask Your Bank To Recall The Funds
If you transferred money to the forex scammer through your bank account or bank cards, you should quickly contact your bank to trace the destination account & recall the funds.
This method will only work if the scammer has not yet withdrawn the funds.
Petition The Regulatory Authorities
If you were scammed by a regulated forex broker, you can write a petition to the regulator who licensed the broker. The regulator will investigate & resolve the issue.
However, if you were scammed by an unregulated broker you can petition the cybercrime unit of your local police force.
They will collaborate with other law enforcement agencies and try to recover your funds.
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