FxBrokerReviews.org – As of April 2019, the spot forex market marketed over $6.6 trillion daily, including foreign exchange markets and futures contracts. With such a large sum of money sailing around in an uncontrolled spot market that transacts instantaneously, over the counter, and with no responsibility, forex scams provide disreputable networks the opportunity to make fortunes quickly. While many once-popular frauds have been eliminated due to severe criminal prosecutions by the Commodity Futures Trading Commission (CFTC) and the creation of the self-regulatory National Futures Association (NFA) in 1982, some old scams persist, and new ones emerge.
Can You Get Scammed In Forex?
Unregulated brokers are not required to report to a regulatory body. This implies that if they fraud you in any manner, whether it’s “niggles” or “misfires” in their system causing severe slippage, or you go to deduct the amount and they don’t process it (take your money), you’re out of luck. It is very little you can do other than post a negative review online since these brokerage firms have no lawful power to respond.
How Do Forex Scams Work
Because of the variety of scams, many people wonder, “Is Forex a pyramid scheme?” No, the Exchange rate is not a pyramid scheme in and of itself. Nevertheless, there are various types of scams in the globe of Forex trading. The most obvious sign of a Forex scammer is the promise of huge profits with little or no economic risk.
To begin with, there is no such thing as a 100% guarantee. If there had been, traders would never share it with other market participants. Some of these deals may appear very appealing, particularly to new traders. As the saying goes, the only free cheese is in the rat trap. The bottom line is that if something appears too worth a try, it most likely is.
To prevent scammers, follow these simple rules:
- Stay safe, and don’t chase empty promises.
- Be especially cautious of software that claims to have discovered a “secret formula.”
- Do not configure any software until you are confident it will not harm your computer.
Another telltale sign is that scammers never sign up with any regulatory body. Remember, genuine brokers still provide evidence of their credibility. Suppose you suspect a Forex broker is hiding their application. In that case, you can consult a regulatory power, which gives you a list of regulated companies and lawsuits filed against regulated companies. This will assist you in determining which Forex brokers to avoid.
How To Verify A Forex Trader
Let’s examine how traders can confirm a US Forex broker’s CFTC registration. Traders and investors are fortunate that the Forex market and the regulatory agencies that govern it are becoming more transparent to ensure client security and safety.
You can conduct research online if you live in the United States and want to understand if a broker is genuinely enrolled with the CFTC. As previously stated, the CFTC assigns brokers unique registration plates to facilitate your research. If a broker claims to be CFTC-registered, you can find their registration number on their webpage. To verify its validity, go directly to the CFTC’s official website (cftc.gov). You’ll also be able to see if any complaints have been submitted against a specific broker and even file your own. In addition, the agency maintains the Red List, which informs customers about entities operating illegally. Contacting the CFTC directly via email or phone is also possible.
How To Spot A Forex Scammer
Forex scams come in many shapes and sizes, and while traders may be concerned about broker forex scams at first, these are genuinely the easiest to detect. In general, if something appears too good to be true, there is a good chance it is a scam. Significant returns, trading conditions that seem too good to be true, and trading schemes that proclaim to avoid restrictions are all examples of forex scams that should be avoided. Pick an excellent regulated broker with a great reputation and a long history to prevent dealer forex scams. For all other frauds, believe in yourself rather than relying on someone else to make your money.
How To Report A Forex Scammer
If you genuinely think you have been a victim of a scam broker, you should first file a complaint with your local regulator. SEBI has established a system in India called the Sebi COmplaints Redress System (SCORES).
Also read: Top 5 Forex Brokers in 2022
Forex Scammer List You Need To Avoid
4XP: The broker ceased fulfilling its responsibilities to traders. Deposits are frozen and cannot be withdrawn.
770 Capital: The broker functioned under a non-existent regulator’s permit; their registration is not affirmed.
Adamant Finance: They lack a regulator, and their user agreement lacks the financial obligations needed before trading.
Perform a thorough research on the forex broker you’re contemplating by visiting the NFA’s Background Affiliation Status Information Center (BASIC). Many changes have pushed out the crooks and old scams while legitimizing the system for the many promising businesses. Even so, be wary of new forex scams; the bait and desire for massive profits will always attract more unique and sophisticated scammers to this industry.