Did you know that the global forex market is worth $2.409 quadrillion in 2022 and $6.6 trillion forex is traded on an average every day? Unlike other markets like the stock exchange, the forex market operates 24/7.
This is the reason why it’s the largest financial market in the world when it comes to value, liquidity, and trading volume.
With trillions of dollars being traded every day, a forex market is a perfect place for unregulated brokers to earn huge returns in a short time. On the flip side, it’s nearly impossible to gain long-term if one is not a professional trader.
What’s worse than that is the fact that a huge number of unregulated brokers online are luring traders to deposit new funds by manipulating the prices of currencies.
Forex scams will exist as long as the forex market exists. These scams are constantly evolving and exist in many forms. Some of these scams are also named after their creators like Charles Ponzi’s Ponzi Scheme.
The best way to avoid getting scammed and being a victim is to educate yourself about Forex trading before entering the market.
What are forex scams, how to spot forex scams, types of forex scams, and how to avoid forex scams, are some things you’ll need to know. Moreover, the process of forex chargeback, what to do when you are a victim, how to get your money back, and how to proceed are equally important things to know.
There are chargeback companies that help a victim recover their lost money through a thorough process. Here’s everything you need to know.
How to Spot Forex Scams?
Since there are a myriad of forex scams out there, many might wonder if it’s a pyramid scheme. While it’s not a pyramid scheme by itself, a world of scams exists within forex trading.
One of the surest tells of a forex scammer is the promise of unbelievably huge returns with none or very little financial risk.
Bear in mind that there’s nothing like a 100 percent guarantee. Do you think if there was one, traders would share it with others? Most novice traders make the mistake of falling for lucrative offers.
However, do understand that if an offer sounds too good to be true, it’s because it probably is.
Another sure tell of a scammer is that they are not registered with any regulatory authority. All genuine and trusted brokers will wear their registration like a badge of honor, but not the shady ones.
In case a broker has a registration but you suspect them to be shady, you can directly contact the regulatory authority to confirm.
What Are the Main Types of Forex Scams?
While scams and their methodology are forever evolving, there are some tried and test scams that new traders always fall victim to. Here are the three major types of forex scams that people usually fall prey to.
Robot scams are where the scammer claims to be using an algorithm to open and close trades. Not all forex robots are a scam like those built by expert advisors in trading platforms.
However, if a forex robot is claimed to provide unrealistic gains, high growth return percentage, and through unregulated brokers, steer clever.
Signal sellers are traders who share trade ideas like which currency pair to bid on, entry price, and stop-loss, among others. Avoid signal sellers that require you to pay a subscription fee, sign up with a specific broker, and have no verified results to show.
Shady Trading Investment
Beware of phony traders who ask you for investment in return for great returns. Once you send them your money, you’ll never see it back. These companies will either ghost you completely or refuse to acknowledge any sort of dealings with you.
Do your research before investing with any trader and find out if they are legit or not.
How to Avoid Forex Scam?
The best way to steer clear of forex scams is to take your own sweet time to do due diligence. Don’t rush into any trading due to the false sense of urgency conveyed by a trader.
When you come across a forex broker or agency, google their business name. If you don’t find any relevant searches, you know you have got a shady business on hand.
If you do find relevant results, look for customer reviews on reputable forex forums. Moreover, you can go through various scam reviews to see if the forex broker you are dealing with is as reliable as it claimed to be.
Also, visit forex forums and look for complaints about the particular agency and talk to users who have posted the complaint about more details. A proper background check like this will help minimize your risk.
How to Recover the Lost Money?
There are specialized services that help victims recover lost money from a forex broker. These companies specialize in gathering evidence, confronting the broker, and recovering the money for a fee.
Apart from these on the personal level, you can contact and reason with the brokers to understand what went wrong.
If the broker is not open to communication, you can call them out on a public forum. Since these traders operate on public image, chances are high that they might contact you after you post a complaint online and offer some sort of settlement.
The next option is to file a chargeback request with the issuing bank to get your money back. Lastly, the trader can either register a complaint with the financial institution used by the broker to receive funds and also approach the relevant trading regulatory body.
By now, you’re armed with the knowledge of what to look out for, how to avoid scams, and what to do if you have been scammed. The bottom line, as always, is to be very careful with who you are trading with and take your own sweet time to do due diligence.