The following are five common foreign exchange fraud methods compiled by Huicha Bian Xiao. Learn quickly and insure your own funds!
1. Fake brokers and unauthorized brokers
These brokers often cheat investors with high interest rates, guaranteed interest rates, zero spreads or other unrealistic promises. With more and more foreign exchange transactions online, it is not difficult for these fraudulent companies to design a high-end web page to cheat investors' trust. Therefore, for investors, before starting trading, we must carefully check the compliance of any platform.
Before trading, traders should search and verify the address of the company, verify the domain name information of its website, and ensure that the domain name of the website is registered under the name of the company or its parent company. In addition, it is also necessary to ensure that the foreign exchange brokers they will enter hold the licenses of relevant regulatory agencies, such as FCA in the UK and CySEC in Cyprus, and accept their supervision.
2. Cloning brokers
At first glance, some companies seem to be registered on the website of a regulatory agency and regulated by it. In addition, they can provide the registration number. However, further investigation will reveal that they are only very similar to real regulated brokers. The names of these cloned companies may only be slightly different from those of the truly regulated companies in spelling, or the cloned companies may directly use variants of registered company names. It can be seen that novices must thoroughly check the basic information of the platform before entering a brokerage platform.
3. Cloning regulatory websites
Another common trick used by fake brokers to deceive novice traders is to post the regulatory status on their websites and put a link to the regulatory agencies' web pages. However, the websites of regulators on their websites are all cloned by them, not the websites of real regulators.
In order to avoid falling into this trap, novices must check the company's registration information on the real regulatory website, and don't trust the regulatory website given on the brokerage website easily.
4. Ponzi scheme or foreign exchange high-yield investment plan
Ponzi scheme is still one of the most common tricks used by fraudsters. If a foreign exchange investment plan is too good to be true, then investors should be on their guard immediately. Ponzi scheme is simply to use the money of new investors to pay interest and short-term returns to old investors, thus creating the illusion of making money, and then defrauding more investments. With more people joining, there will be more money to pay the so-called "profit". In the end, the plan failed and the swindler disappeared with everyone's money.
5. High-priced training and education programs
Traders should also be wary of so-called "training programs" that claim to bring huge profits to themselves. These products are often too expensive, but they can't deliver on their promises. Although foreign training is very useful for learning the basic procedures and guidelines of foreign exchange speculation, all courses that claim to teach someone to become an expert in a short time are basically deceptive.
In fact, there is a lot of free foreign exchange information on the Internet, and related resources include YouTube, podcasts, webinars, demo accounts and so on. Novices can use these resources to learn foreign exchange knowledge. They may be as useful as or even more useful than expensive training programs.