Foreign Currency Trading (Forex) Fraud
Just like the stock market trade the Forex market is a complicated , volatile and carries substantial risks. The Forex market is not the place to put any money that you cannot afford to lose, putting your retirement funds is the Forex market is dafenetely a very bad idea , as there are very high possibility that you some of money or all of it can be lost t very quickly. With concern IPSA observed and witnessed a sharp rise in Forex trading scams mostly on the internet and through Social media and print media in South Africa.
There are defenetely things that the investing public need to watch of and be able to identify identify potential fraudulent Forex trading offers.
SIGNS OF A POSSIBLE FRAUDULENT FOREX TRADE
- The investor is mostly made to believe he can profit from current news already known to the public. (Already on the Market)
- Offers are often made through word of mouth referrals or emails from friends and relatives, members of community organizations, churches, or social groups.
- The investor is mostly contacted and asked for personal information such as your name, phone number, and email and home addresses, even your banking details
- Are two quick to ask to open an account and that the space will be offered to some one if you do not open up an account quickly.
- Promising that with Forex there is no “down-turning market”.and always there is a guarantee of making profits.
INVESTORS NEED TO WATCH OUT OF THESE POSSIBLE PERSUASION TACTICS :
- Fraudsters will always make promises of prospect of wealth and enticing and persuading you with something that you really want want, but can’t have, a typical example of this “This Rand /dollar deal is guaranteed to rise double what your current investments are doing.”
- At most times they try so much to establish credibility by claiming to be with a reputable firm in the Forex trade market , will even mention one , they will also go to the length to have a special credential or experience, at typical example is “Believe me, as a 10-year senior vice president at this firm, I would never sell something that doesn’t produce.”
- Leading you to believe that other savvy people have already invested.
“This is how Bob down the street from you got his start. I know it’s a lot of money, but I’m in—and so is half our club. It’s worth every dime.”
- Offering to do a small favor for you in return for a big favor.
“I’ll give you a break on my normal Forex commission if you buy now—half off.”
- Creating a false sense of urgency by claiming limited supply, or that you have been specially selected as a result of your profile. An example of that will be “There are only two units left and the US market is about to open, so I’d sign up today.”
INVESTORS MUST ALSO WATCH FOR THESE RED FLAGS TO HELP IDENTIFY FOREIGN CURRENCY TRADING SCAMS
- There are often guarantees and promises that with Forex, there is no “bear” market( a condition in which securities prices fall and widespread pessimism causes the stock market’s downward spiral to be self )
- There are also firms that claim you can or should trade in the inter bank market, they often make quick requests to send or transfer cash quickly via the Internet, by mail, or otherwise eg, do you have your credit card with you now? can we go ahead and process the payment that we can set up your account.
- There is also difficulty getting background information or any other information about the person and/or the entity they claim to represent.
ASK SOME QUESTIONS BEFORE YOU PARTICIPATE IN FOREX TRADING
- Investors should contact the FSB, IPSA or any other regulatory organization they claim to be regulated by to check the company’s registration status, business background, and disciplinary history if any.
- It is prudent for an investor to ask and inquire about the details of the Forex trading market and your obligations and risk should you decide to participate, ask about the firm and the individual’s performance record on behalf of other clients
- If you know anyone who has been offered to participate in that particular Forex trade offer or anything similar but is not willing to comply ,ask that person the underlining reasons of hesitation to participate in such a lucrative offer to make quick money. It also important to request all information via written correspondence . Do not only depend on oral, telephonic conversations, promises or statements
- Investors should also take the initiative to check and establish the credibility of all information they receive to ensure that the company is and does what it says it does, it is prudent to request for a written risk disclosure statements for your attention and perusal so that you are in a position to make an informed decision to participate in that particular Forex trade offer.
- Consult and seek for the advice of an independent and licensed financial advisor or consultant whom you trust before you participate . better be safe than sorry.
QUESTIONS TO ASK ANY FINANCIAL PROFESSIONAL
- How are you qualified to provide me this service? How does this product meet my financial needs? How are you paid for your service?
THE GOLDEN RULES TO REMEMBER WHEN YOU DECIDE TO PARTICIPATE IN FOREX TRADING
- Do not deposit more funds than you can afford to lose.
- Do not mortgage your home or cash in your savings in order to trade in the Forex market.
- Do not trade on margin unless you understand it. Margin trading can make you responsible for losses that greatly exceed the dollar amount you deposited. Short training offers normally do not work.
- Watch out for those that also say to you that they have developed a platform or a system that will allow you to execute trades with no difficulty. Sometime thy will also tell investors that they will be executing the trades on your behalf while you do nothing, this might also be used by fraudsters as a means of making feel your risk is minimized next to zero as you may have developed trust in them
Please report any suspicious activities and or If you have questions, or believe you or some one has been defrauded through the Forex trading , please contact the FSB at 0800202087 especially where you strongly feel that the FSB is not taking any appropriate action or providing with adequate assistance kindly contact IPSA (011) 534 8532, we will ensure that appropriate action is taken and adequate assistance is provided to you as investor.
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