Scams have been big news lately, especially in Malaysia. GCG Asia notes the frequency of latest news of scams, forex and otherwise have been increasing at an alarming rate with a new victim being reported almost daily. Forex trading is an increasingly popular form of investment profit-making, and so have forex trading scams grown in tandem.
With that in mind, GCG Asia Forex Scam experts are here to break down a few common Forex scams so you can avoid them.
“Scamming is nothing more than a deceitful, dishonest act performed usually by a business or an individual. There are many ways to cheat both tourists and locals out of their hard-earned cash. Some offer you a service, or simply send a fake SMS in an attempt to acquire your personal information, as well as a promise for a certain amount of goods. In the end, none can fulfill what they have promised. They end up taking your money and running away,” says GCG Asia Forex Scam expert Lucy Chan.
What is A Forex Scam: GCG Asia’s Forex Scam Primer
If you think forex scams don’t concern you then you might think twice. GCG Asia Forex Scam experts tell us that forex scams are very common and quite a popular way to scam new investors or people new to trading forex.
Before going into how you can avoid getting scammed, GCG Asia Forex Scam experts outline some common forex scams and how they work.
Forex Scam 1: Robot scams
We all want to earn money without having to do any labour. Nonetheless, there are many scammers that offer trading systems or robots to make the hard work of trading hard work easy for you by automation, as discovered by GCG Asia’s forex scam experts.
One major draw of forex trading via a robot is that you may make money while the robot does all of the labour. It’s unknown if these techniques are valid since they have never been evaluated or confirmed by anybody outside of the business.
Regardless, GCG Asia Forex Scam expert Lucy Chan states that it is not a good idea to depend on a robot while making financial and investing decisions.
Computers cannot guarantee against mistakes. Because of this, even computers (and no one else) cannot possibly foresee global events or other financial cues that may influence the market. It may seem enticing to use automated trading tools, but platforms that guarantee earnings via forex trading robots are nearly always a fraud, says GCG Asia Forex Scam expert Lucy Chan.
And thus, while it may seem like a good idea to leave it to the robots, you should avoid doing so.
Forex Scam 2: Signal Seller Scams
GCG Asia forex scam experts explain that signal sellers are those who demand a fee for advice on buying and selling a currency pair. In exchange, traders typically must pay a monthly fee to signal dealers. Additionally, people offering this service often claim that they will outperform the market and that they are very skilled traders.
GCG Asia forex scam experts explain that the scam is that these signal sellers take investors’ money, but investors get no information at all in exchange. And even if you do get data, a significant number is probably not sound advice. Due to the possibility of positive testimonials and glowing reviews of profits by so-called clients, identifying scam signal sellers may be tough. So be alert!
Forex Scams 3: Multi-level Marketing (MLM)
Forex’s popularity has meant the proliferation of multi-level marketing (MLM) firms whose whole business model is centred on forex trading. It goes without saying that these firms already have a large degree of distrust. According to GCG Asia Forex Scam expert Lucy Chan, several famous forex MLMs charge a monthly fee in exchange for daily trading signals and forex educational materials. People who get more people to join are rewarded with higher levels of commissions. “Like any MLM, the goal of these companies is to recruit new members rather, and use the funds from these new investments to generate pay-outs. If new membership dries up, that’s when withdrawal issues will start happening,” said GCG Asia Forex Scam expert Lucy Chan.
Forex Scam 4: Scam Brokers
GCG Asia Forex Scam expert Lucy Chan explains a forex broker is a company that offers you access to a trading facility in order to trade currencies. In order to trade in forex, a broker is usually required. Unfortunately, some brokers are dishonest and fraudulent, and will attempt to cheat or overcharge you. “Doing your homework on any broker is generally a good idea. While companies sometimes charge fees for trading in forex, these fees should be nominal, so do your homework for what’s a fair rate,” said GCG Asia Forex Scam expert Lucy Chan.
Forex Scam 5: Scam Forex Funds
When you open an account with a forex fund, you may find forex funds that will pay out profits obtained on your initial investment and so, will provide you with a regular income. Unrealistic investments will provide higher-than-average annual returns that seem very attractive, which is a major red flag. GCG Asia Forex Scam expert Lucy Chan urges investors to select less risky and established index or mutual funds or asset trusts.
What Can You Do to Avoid a Forex Scam
Now that we know the types of forex scams, being alert to them can be much easier. GCG Asia Forex Scam expert Lucy Chan says there are a few things you can ask yourself to check whether a forex broker, platform or fund is legit.
GCG Asia Forex Scam experts recommend a few key questions to ask yourself in your due diligence process before beginning forex trading:
- Does the broker have a licence?
- If the broker is licenced, how trustworthy is the regulator?
- Is the broker providing money for opening an account, or offering a share of profits?
- Is the broker offering a cash bonus for opening an account?
- Does the company have a credible website with detailed information on financials, company history, contact information?
- Is the broker offering automatic trades or signals with guaranteed profits?
GCG Asia Forex Scam expert Lucy Chan warns that if a broker offers money, returns or makes promises of profits of any kind, that should sound alarm bells. “Use common sense! That old saying is true, if it is too good to be true, it is!” says GCG Asia Forex Scam Expert Lucy Chan. Another frequent swindle is promoting lucky draws of lavish prizes like luxury cars that are given away to lucky investors.
Now that you know more about this very common type of forex scam, hopefully now you are in a better position to avoid becoming a victim.
If this is the type of content you value, visit GCG Asia’s website for the latest news and fintech updates!