How to Avoid Forex Broker Scams To Ensure The Safety of Your Wealth & Assets
The digital platform has become an essential part of business and trading, especially when the entire world lives inside a virtual reality. Initially, business used to be carried out through personal meetings, however, the style of conducting business has revolutionized to texting and virtual meetings without getting to know your partner in real life. Thus, it leads to an increase in scams and frauds.
Forex trading is a digital platform where people conduct their trading activities. In order to carry out the business, investors hire brokers to carry out their trades and make maximum profits. However, the brokers, in most cases, turned out to be frauds, resulting in huge damage and loss for the investor. Thus, it is essential to find a broker who has a good reputation and is well regulated in order to avoid scams.
If you’re someone who is into Forex Trading, then you’re definitely at the right place. We can give you the best practices in identifying red flags as well as help you in recovering your stolen money from scammers!
Table of Contents
An Inside View of Forex Brokers Systems & Processes
The popularity of forex platforms attracts many investors, especially due to the high returns on investments. The reports and statistics have also indicated that the majority of fraud brokers convince investors to work with them by guaranteeing a massive profit or return on a small investment. For instance, a $1000 return on $250 of investment. This does intrigue the investors, but little are they aware of the trap set in the future.
8 Tried & Tested Ways To Avoid Forex Broker Scams
What can you do when you realize a broker's offer is not for you?
Brokers make offers to attract investors and continue the cycle of online trading, keeping the best interest of the investors in mind. However, there are brokers who carry out unethical and unregulated activities which maximize their own interests. Such offers are not for the investors, those are to assist their own purpose. In such cases, investors should initially read blogs and articles in order to gain knowledge regarding scammers and their manner of working.
Secondly, while choosing the broker, with whom the investor intends to continue the business, the investor should do research regarding the reputation of the broker, the well-reputed brokers are more likely to be well regulated and ethical and communicate little details with the investor to promote transparency. Therefore, the investor should keep a keen eye on the broker’s way of working, not merely the big amount of profits coming into the pockets because those massive amounts can be turned into zero or null within a night by the broker if he intended to scam you. The scammer will act in an unusual way, demanding more investments and trying to manipulate your decisions. Thus, you can instantly take out your money back and contact your bank to protect your assets as they might have hacked your accounts.
How binding is the contract?
A contract is considered an agreement between two or more parties, in a forex trading platform, those parties will be the broker and the investor. Both the parties are legally bound to act according to the agreements of the terms fixed between them. If any party, due for any reason, could not or did not act according to the terms, he or she will be liable for the loss and will also be fined or punished for unethical and unprofessional behavior. The contract includes two sides exchanging the benefits, for instance, the investor gives a certain percentage of profit to the broker as he does not work with no interest or return for the task he is performing.
Thus, this is why binding is considered a contract in order to protect the rights of both parties and make sure both of the parties perform their task in the best possible way. This ensures the prevention of losses and the one who caused them will pay for it. Intention plays a vital role in the formation of contracts, the both parties, the investor and the brokers, should have intentions to work together and abide by the terms. For instance, if the investor approaches the broker and collects some information regarding his way of working, he will be considering gaining information not binding to a contract.
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How easy is it to reach customer service?
The most crucial element in convincing the customer or investor to put their money in the company is ensuring the best service is provided by a respected company. For instance, there are multiple websites that provide the opportunity to investors to carry out online trading, however, the customer has to merely choose one. Therefore, they will look for a company that has a good reputation for accommodating customers.
The customers look for the protection of their rights and how well a company can solve their issues. Thus, that influences their decisions and choices. For a company, in order to attract customers, they have to be more accessible and transparent as the digital platform is full of scams and frauds. The spread of positive word of mouth will eventually make more customers join the digital trading platforms. For instance, it has been reported that the majority of the investors who joined forex and other trading platforms heard of it from their family and friends.
The victims mostly report irresponsibility and unavailability of the authorities at the time of help. The company states several reasons to put away the blame on them by stating the risk and unpredictability of online platforms. Thus, it causes many investors to leave the platforms causing damage to the company’s reputation. Therefore, the company should make sure of every possible way to accommodate their customers.
Can you contact the broker by phone, Skype, or email?
The trend of contacting brokers or people with whom you intend to continue the business has changed over the course of time. From contacting people back in the 19th and till mid 20th century by setting up a meeting in a most suitable place, bringing up the best ideas and making sure to be successful in making contact. In the digital world where unknown people are contacted on social media and businesses are carried out through skype, emails, and phones.
Thus, it increases the risk as the broker or the other party can manipulate your thoughts about them by portraying the best, yet, fake version of them. You will only know what you are shown, beyond that, it would be a misery. The risk of them converting into scams increases as the trust demands transparency and it is absent on the online platforms. The trend of portraying the best lives has taught people to manipulate information for their own convenience. Thus, the convenience turns into another party being scammed. This led to an immense increase in scams, particularly during covid as the entire business and communication moved to the virtual podium. The scams have been reported to have increased by approximately 30% to 40% during that period as people got used to connecting more through online media than physically.
Do they list a physical address?
Do you even know where to catch your broker if some uncertain incident happens? Well, most investors will say no, because that is not even considered an essential element. The brokers are smart enough to provide their restricted information and the investors are dumb enough to trust them based on that information. Mostly, the victims get to know after being scammed that the broker lives in a shady region of the world, of which they are unaware.
Thus, the broker turns out to be not reachable due to a lack of awareness and the presence of mind of the investors. Therefore, the investor should gather the required information of the broker, which includes its identity card, home address, and other required details. Additionally, the investor should not merely trust the information he provided, he should make sure the data is accurate by getting it checked by the responsible authorities.
Do they use actual names?
The very first tactic of scammers is to hide their true identity, even their true name. Definitely, a broker who has been working for a long time would have built a good reputation, so they will not need to use their fake names. On the contrary, the brokers, those who are new to this platform and working with particularly ill intentions, are more likely to use fake identities and fake names so that they become unapproachable to the authorities. How can you even reach a person who is acting like a ghost, with no accurate identity or name, yet he exists?
The investor can only make sure of the broker’s credibility by digging more into the details of him, and that is crucial to ensure the protection of the investor one is investing. The victims have shared instances where the same person played several roles in order to strengthen the customer’s trust and later he/she disappears. Thus, the most essential question one should have in mind is whether they are using their real identity or pretending to be someone else because if they are pretending then they are indeed scammers.
Are they a registered company?
The only chance for one company to be authentic is if they are registered. The registered companies are held liable for their actions and accountable to the government. There have been several companies running the business of doing online trading. However, few of them are well reputed and registered. Additionally, the registered companies have certain criteria set for any broker to join that ensure the users’ information and asset protection.
Further, the investor should also make sure that the broker with whom he/she is willing to work should also be registered in the company. The registered broker will be bound by certain regulations and manner of working imposed by the company, which reduces the chances of being scammed. It also indicates that the one who has been registered must be willing to work with good intentions as the brokers have to go through the processes which also include sharing personal details. Thus, such brokers do not act like scammers, hiding their personal information to protect themselves in the future and acting like a ghost. Further, the essential details considering the broker’s privacy as well are shared with the investors for which again it is essential for him to be registered.
Can they provide performance history?
One is known for the work they have done, likewise, the performance of the broker plays another crucial role in convincing and manipulating the investor’s decisions. Would you work with a one with great performance in the past, resulting in huge profits for other investors and working in the most decent and professional way? Or the broker who has no work history and no reviews? Definitely, the prior one because you can rely on them. In the case of scammers, some of them do share their history and most of them do not. The reason is they remove the traces of any work, particularly scams, they have done in the past, so they can not get caught. Some scammers who do put forth their working history, share inaccurate and misleading information.
Make Sure That You Are Working with An Authentic Forex Broker!
The digital platform has become much more vulnerable and risky with the passage of time. Initially, there were very few people who knew how to operate it and had the skills required to be part of online trading. However, over time, the trend of digital operations and businesses attracted the majority of the audience. Now, almost every activity is being carried out virtually. Thus, the scammers had also learned tactics and tricks to lure people into their traps using technological knowledge.
The percentage of people being scammed is more than people making their business work smoothly. Particularly, during covid when a massive population was unemployed and opportunities were absent, the scammers used tactics of stealing money from investors working online in order to make ends meet. The mere question one has in mind when they join such platforms is how they can protect themselves. The answer is by being more aware and present while dealing with brokers.
do you need help?
A lot of those who contact us have questions and concerns about their personal and business data being compromised. We aim to arm you with the legal and technical know-how in the fight against scams. Also, we will be able to refer you to top scam recovery agencies.
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