Fraudsters are taking advantage of a rise in popularity of currency exchange online trading schemes with bogus claims of get-rich-quick schemes.
Foreign exchange – or forex for short – trading is a much more simplified version of stock market investments. Punters will use a website or app stake a ‘call’ or ‘put’ on the price of a currency or market, gambling on whether it will rise or fall. These apps have proved very popular due to the simplicity of the betting, known as binary options trading, and the promise of a quick return or loss on their stake.
Binary options trading is legal, but scammers are using the rise in popularity to promise huge returns with fake success stories.
In reality, this is an advance fee fraud. Victims have been told to send money ahead with a promise of huge returns with a cut of the profit, only to be blocked or ignored by the scammer after transferring money.
In some cases victims lose out twice, as they’re told their trading has been successfully and are asked to send more money to invest or to send a fee to release the profit they’ve supposedly made.
Avoiding scam stockbrokers
If you’re approached by someone on social media who claims to have inside information on forex, do not reply and report them to us. Reputable brokers and investors don’t use social media to personally offer investment. Like other forms of betting fraud, ask yourself why anyone would want to share their secret if their scheme is as successful as they claim?
Identifying forex fraudsters
- Check their social media profile – a lot of fraudsters will set up fake accounts and their social media activity will look suspicious.
- Testimonials might not be genuine. Fraudsters often include fake quotes or photos of others they claim are customers who cashed in. This is to give victims a false sense of confidence in their scheme.
- Don’t let a stranger invest your money on your behalf. Legitimate forex trading will let you make the decisions using a programme or app.
- Never pay to invest in forex trading using a bank transfer or a money transfer agent like MoneyGram or Western Union.
- Binary options trading is not regulated by the Financial Conduct Authority. This mean that If you’re not paid returns or reimbursed by a trading app, you won’t have access to the Financial Services Compensation Scheme.
Protect yourself on social media with GetSafeOnline’s tips.
To report a fraud and receive a police crime reference number, call Action Fraud on 0300 123 2040 or use our online fraud reporting tool.
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