“A fool and his money are soon parted” is probably a bit harsh really when it comes to online trading Forex and Crypto scams.
I’d say more like the greedy and the naive. But even sometimes the innocent.
Good old Tony Hetherington in the Mail on Sunday is still fighting the good fight and highlighting online trading scammers as and when they are reported.
Every single day, there are more and more scams being promoted on social media sites like Instagram and Facebook.
Whilst, Google, Facebook, and Instagram banned forex and crypto advertising for anyone that isn’t a regulated broker a new breed of scam advertising has emerged.
Fake educators, who fall outside the regulator’s oversight and are often promoted by influencers rather than advertising networks are lulling people in with clearly staged luxury lifestyles.
These scammers make their money by referring inexperienced traders to offshore brokers who are often not regulated by the FCA.
Any decent broker would not accept a partnership with an introducer who refers clients in such a way. Mainly because good brokers look for long term client relationships. The days of churn and burn clients are over.
But now the FCA is trying to reach a more relevant audience by advertising directly on Instagram itself.
It is remarkable actually that people are still being scammed online, as even the most basic of internet searches should show negative reviews on forums or at least a lack of positive reviews.
The FCA’s put together what looks like a typical online trading scam, a chap on a plane, with some flashy stuff. Then peels away the veneers to show it’s all a big fat scam.
There is a section of the FCA’s website that explains how online trading scams work and highlights what you should look out for…
- Be suspicious of high returns (if it’s too good to be true it probably is)
- Never respond to cold calling (just hang up)
- Always conduct your own research (do a Google search for reviews)
- Check the FCA register (search for individuals and companies)
- check the firm is not pretending to be a legit firm (they could be cloning a firm to look legit)
- Check the FCA warning list (interactive form)
- Check Companies House (to see if the firm actually exists)
- Talk to an independent financial advisor before investing (or just talk to a friend and get a second opinion)
What to do if you have been scammed:
Find out more on the FCA website here
Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.