How to avoid getting scammed: ‘A fool and his money are soon parted’

In this article I will be looking at the tactics the scammers use in-order to trick the inexperienced newbies to lure them to send money to them. Take note that forex industry has nothing to do with scammers, and they should not be associated or referred as ‘forex scammers’. These people just claim to be expert traders and account managers to make you believe they are your ticket to becoming rich quickly.

Therefore I urge those who are new and interested to start trading to take note of the following points:

Forex trading involves high risk

If you have been told that trading in the financial market involves no risk and it is all about ‘invest and forget’ kind of a thing, know that the person who told you that is a scammer. There is absolutely no way that the financial market can be risk free. There is no business that doesn’t involve risk.

Forex trading does not guarantee a fixed return per week or month

If you look at the facebook groups, you will find that many posts give you a promise of mouth-watering return of a fixed sum of profit per week or month. Take note that it is not a feature of forex trading or binary options trading. No one can guarantee a fixed return. The market does not make fixed movements according to any retail trader’s wishes, but rather the market moves due to demand and supply in the market. Therefore, anyone who guarantees a fixed return per week or a month is a scammer.

DO NOT send money to the so called ‘account manager’

Scammers often ask their target new comer to send money to them through Western Union or a similar method. Do Not send money especially through Western Union Money Transfer. If there is someone you know well and you trust, use a service like PayPal, which gives buyer protection. Scammers often don’t accept PayPal payments. Even if they do accept PayPal, look at other points and verify the person. Understand that, to trade forex, you don’t need to send money to anyone.

Create your own trading account with the broker of your choice

Tell the ‘account manager’ that you will create the account by yourself and with the broker of your choice. If the account manager insists on dealing with a particular broker and that he insists that he should be the one to create the account for you and you must send him money, know that he is a scammer. He will try to give very convincing reasons for it, for example that he has a special software which he can link only if he creates the account by himself. This is an absolute red flag. If you are not good enough to create a trading account with a broker, you are not ready to be in financial markets yet.

Noticeable behaviour of scammers

  • They often promise to make you rich over a a short period of time. They often literally beg you to invest money by sending it to them.
  • They hate it if you ask them questions about forex market. They are often not experts in financial trading really.
  • They will get annoyed if you don’t appear to fall for their trap easily.
  • They often use fake websites which appear to be professional binary options sites.
  • Their posts on facebook may change messages slightly but almost all of them has a recognizable theme to lure newcomers to them. At this time around their theme appears to be:
    a) give a warning about scammers – to gain trust
    b) say that he himself was a victim of scam – so he can’t be a scammer right?
    c) he has found an expert account manager, who has gained back all that he had lost before.
    d) recommend this expert account manager to everyone. – in fact his account manager is he himself using another id.

 

What do they do if someone falls for their scam?

It is quite often that, despite our warnings and efforts to educate the newcomers, they do get tempted to fall for the promise of getting rich quickly. If such a newbie does fall for the scammer’s trap and actually send money through western union, the scammer can immediately deactivate his fake facebook account, make a new facebook id and continue his ‘con artist’ business. However, this may not be the case often.

what usually happens is, the scammer creates a binary options account with a fake broker website they themselves operate. The victim gets his login, which makes him happy. Soon the account will start showing really nice profits. At this stage the scammer may even ask the victim to send more money in order to get even more profit, now that richness is within reaching distance. The victim often sends more money, which gets added to the balance of his account, which makes the victim to trust what is happening even more. Now the account will keep massing huge returns (actually none of the money he sent is being used in it). At some point the scam account manager will say ‘let’s withdraw your profit’. The unsuspecting victim doesn’t know what awaits him, it is his moment of thrill, now that he is finally going to get his rich life. His trading account probably shows a balance of over $80,000 probably.

But the account manager will say, ‘to withdraw this amount and transfer to you, we will need transfer charges, so kindly send $750.’. The victim by now has spent his months of saving and probably can’t send that money. So the money will lie in the trading account for some time. Or if the victim has that much money and actually believes the crap and send that money, he is the dumbest person ever. That will be everything he hears from the scammer, his facebook id will be blocked by the scammer. The scammer often deactivates his own id that he had been using and open a new facebook account with a new name with new pictures of someone else.

Update: Some days after I first wrote this post, I observed something I had not looked into before. Since many people have started exposing the scammers and people have started getting bold so are becoming less likely to send money just like that, scammers have developed something new.

The scammers have grown smart. They have created many websites that appear to be good websites. So the new tactic is that the scammer will ask the newbie to create an account with this ‘reliable broker’, and ask for his username and password. And then the scammer himself will fund the account (ofcourse not with real money). Wow! How generous? So someone who gives money like that can’t be a scammer, can he? So, soon the scammer starts managing the account and soon it generates loads of profit. The unsuspecting ‘owner’ of the account has no idea what waits for him. So after the account generates so much profit, it’s time to withdraw the money. The agreement between the scammer and the account owner is that 20%(for example) profit sharing. So the owner enters request withdrawal of profit. So far he has not seen anything to suspect of scam. He created the account, it is in his name, a generous person has gifted the capital. No harm no foul, right? wrong!

As soon as the withdrawal request is entered, it goes through yes, the payment has been processed, but yes the account holder is informed that it may take 5 business days for the money to arrive in his bank account. Okay, a success story, right? Wrong!

But now starts the real scam. The account manager would now say, ‘ok, so now you are going to receive your profit, kindly send me my share of profit of 20%.’ Of course now that he is getting rich, the money is going to arrive in 5 days, he will be obliged to send the money from his own pocket. As soon as the money is sent, the ‘funds security department’ will send an email to the victim saying ‘you account has been locked due to security reasons, contact us for further verification of your account’. That verification process will never ever be complete.
So,  what can the new comers do in order to avoid all this?

Educate yourself. Learn about financial trading. It is not for everyone. It is not for those who are looking to get rich quick. It is also not for those who want to get rich without making an effort to it.

There are enough resources available on the internet. If you take your time to do research you will find enough resources to learn how to trade. Become your own account manager.
I have written a tutorial about how you can recognize fake websites. Click here to read it.

If you contact me, I could also provide training materials that is good enough if you have the patience and go through them step by step.

If you contact me and provide the url of a particular website, I can do some investigation and send you a report on whether the website could be a scam.

Use the form below to contact me

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