Forex trading scams: Customer Advisory: Avoid Forex, Precious Metals, and Digital Asset Romance Scams

trading forex

Withhold your money and personal information until you are sure you are dealing with a legitimate entity. Ultimately, the trader will pay for the fake robot and also end up losing any funds they entrust to this software. If you must rely on software, create your trading parameters or put your trust in legitimate, well-known platforms. Generally speaking, forex trading is no more or less trustworthy than any kind of investment, with plenty of legitimate marketplaces as well as bad actors. What you should not trust blindly are unsolicited offers to join an investment scheme. The victim noted differences in communication before and after investing the money.


The best thing is to contact the Commodity Futures Trading Commission. If you act quickly, there may be some hope of getting your money back using a bank transaction reversal. • Attempt to reverse the charge with your credit provider, or ask for a chargeback.

Individuals and companies that market systems—like signal sellers or robot trading—sometimes sell products that are not tested and do not yield profitable results. Initial contact is made through dating apps, social media, or “wrong numbers” made through private messaging apps. The fraudsters commonly pose as executives, business owners, or successful financiers and use extensive social media personas to support their stories. They often share pictures of home-cooked meals and pets, and research the cities they’re supposedly from so they can reference restaurants and other sites.

Forex trading scams

For instance, a buy order is filled at a much higher price, which limits the eventual profits that can be realised on the trade, if any at all. There is also ‘stop hunting’, where the broker will seek to take out the stop loss applied by the investor before continuing to stream the correct prices. Essentially, price manipulation will result in the generation of losing trades for investors.

Fraudsters use lots of sophisticated techniques to steal money through forex scams. From adverts on social media to setting up fake websites, fraudsters use lots of tactics to trick investors into handing over their money. A persistent scam, old and new, presents itself in some types of forex-developed trading systems. These scammers tout their system’s ability to generate automatic trades that, even while you sleep, earn vast wealth. Today, the new terminology is “robot” because the process is fully automated with computers.

Unauthorised firms aren’t protected by the FSCS so it’s more difficult to recover your money if anything goes wrong with the firm. When no more members can be recruited or membership starts to drop, the leaders usually close the scheme and take all of the money. The software in legitimate forex robots can be tested and reviewed by an independent body to make sure it works. A forex robot is a software programme that can automatically buy and sell currency for you using an algorithm.

Claims like “90%+ accuracy” are an immediate indication to be cautious. Even the best traders and technology cannot achieve this level of accuracy. With a little investigation, you can actually check their previous signals against historical market data.

In reality, the so-called investment group was operating out of the Bahamas, well outside the jurisdiction of the FCA, and his money was gone the instant it was transferred. Initially, the scammer’s digital footprint appeared to only be an Instagram account, resplendent with eye-catching emojis, expensive cars, big swimming pools and, of course, mountains of hard cash. The account in question had also managed a moment of viral fame through a video of himself distributing cash hand-to-hand on a busy UK roadside. Account takeover attacks, which is a particularly dangerous prospect in the forex vertical. As the nature of arbitrage and short position opportunities in forex suggests large amounts of liquidity to turn a profit, a large amount of liquidity can potentially be drained out of a hacked account.

If contacts refuse to meet or video chat, that should be a red flag. For example, ask the person to send a selfie holding a piece of paper with your name and date next to his or her face. Screen capture the love interest’s profile picture or other pictures and use reverse image searches to see if they have been used in other scams or by other people. Trying to build credibility by claiming to be with a reputable firm or to have a special credential or experience. Eszter has been writing and editing BrokerChooser’s content since 2021 bringing her more than a decade-long experience in journalism to the team.

With such a fat, juicy carrot dangling in front of internet users’ collective face, a diversity of fraud and scams are inevitable. Let’s take a look at some of the red flags and warning signs for fraud that exist inside this already risk-hungry industry. In the current financial ecosystem, this is very often seen in cryptocurrency and forex – foreign exchange – investments. Some investment companies offer managed forex accounts, where an expert forex trader invests currency on your behalf. And investors usually have to pay a fee or commission for this type of account.

However, in most cases, a legitimate investment will also give the trader a very good chance of making some profit if they make the right choices. Bence Jendruszák is the Chief Operating Officer and co-founder of SEON. Thanks to his leadership, the company received the biggest Series A in Hungarian history in 2021. Bence is passionate about cybersecurity and its overlap with business success. You can find him leading webinars with industry leaders on topics such as iGaming fraud, identity proofing or machine learning (when he’s not brewing questionable coffee for his colleagues).

As your trading partner, AvaTrade offers attractive trading conditions as well as handy trading tools and resources to help you realise your investment goals. Mention the words “Forex trading” to a lot of people and their first reaction is “it’s a scam”. This is unfortunate, because there exist plenty of Forex brokers who provide a service through which its possible for traders to make money.

Six common forex trading scams

You’re asked to give bank account details so the “recovered” funds can be deposited directly into your account. No phone numbers are provided, or you’re asked to communicate through Telegram, WhatsApp, or other messaging platforms, and they use web-based email addresses such as @gmail or @yahoo. Be aware that scammers are also focusing on promising to recover the money you lost to a scammer. Check the reviews only on independent platforms, like BrokerChooser, not on the broker’s website.

commodity futures trading

It is recommended that you only work with brokers that are registered in reliable jurisdictions. The best option is for the company to be registered in your country. The broker must provide information about the name of the company, date of registration, place of registration, and legal address. Make sure the company has contacts, and it offers chat, email, and phone contact; check whether these channels actually work. Choose a forex broker with awell-established background and top-tier regulation. Fraudulent service providers impose withdrawal restrictions and/or charge a massive commission when you want to access your funds.

How to spot if a broker is a scam?

Toumbi also warned that «investing money on foreign exchange platforms always bears a financial risk, there is no guarantee that you will receive profits». We have received multiple reports and questions about trading groups active on popular messaging apps like WhatsApp or Telegram. Some of these groups advertise themselves as traders who offer ‘custodial’ services – they promise massive gains in a short period of time if you deposit money into their account. If you’re looking for a forex broker, check the best forex brokers or read all forex broker reviews. Refuse Unsolicited Marketing — Any broker that is legitimate and has a history of providing good services does not need to go around soliciting customers and using high-pressure sales tactics. This is a sure sign of a broker that is on a mission to recruit traders at all costs, which is something you need to be wary of.

Because Forex is a massive goldmine, unethical businesses attempt to attract unsuspecting customers with promises of making big money round the clock. They portray Forex trading and the ability to profit as something quick and easy. As long as the lucrative Forex market exists, Forex scams will always exist. It is therefore prudent for investors to be able to identify and avoid Forex scams in the various forms they come in. They tout their long experience and trading abilities, plus testimonials from people who vouch for how great a trader and friend the person is, and the vast wealth that this person has earned for them. All the unsuspecting trader has to do is hand over X amount of dollars for the privilege of trade recommendations.

Forex Fraud Prevention for FX Companies

Though the facade of this kind of scam might change – maybe tomorrow the same scammer will approach victims through the Metaverse – the red flags and the intention remain the same. Mobeen Azhar, the investigative journalist, did a deeper dive into the network of “investors” recruited. One victim reportedly invested upwards of £17,000 after being attracted to the scammer’s lavish online presence. After transferring the money, the victim watched his return ostensibly grow via a private WhatsApp group, before being told his balance had dropped to nearly nothing. Money laundering is a major concern although it does not directly target the FX platform. This is because by law, companies are accountable for any money laundering taking place on their systems.

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