When browsing through Instagram it is completely evident that there is zero control over what is posted, portrayed and promoted for potential traders.
What are Instagram trading scams?
Trading scams on Instagram are “get rich quick schemes” whereby influencers post lifestyle pictures and videos of expensive cars, jewelry and holidays perpetrating that they were paid for by successful trading.
The FCA even joined Instagram to warn users of the danger of forex scams
Types of trading scam on Instagram
Instagram forex traders
Every single post looks like a get rich quick scam with supercars, champagne and “lifestyle” traders seemingly making millions from trading the markets. Not to mention the “forex education” providers who claim they can cover the cost of a weekend away in the sun with a single trade put on from a private jet.
Just check out these hashtag on Instagram: #forex & #trading.
So, are any of these self-professed trading experts on the Instagram platform legit?
Financial services are one of the most highly regulated industries in the world and financial promotions are even more so. They need to carry a plethora of risk warnings, disclaimers and caveats before they are even put to the compliance and legal teams for consideration.
It’s obvious that Peter Andre and Richard Branson didn’t really make their money from trading in binary options (as some fake articles promoted on social media suggest). Now it’s just kids driving gold Bentleys and quaffing champagne on a private jet.
Anyone who understands the risks of trading would be supposedly clever enough to know that all these Instagram posts are a complete scam. But, those that don’t (and aren’t) are going to get drawn in and scammed.
Social media is completely unregulated and if the government can’t stop terrorist propaganda they won’t have much luck trying to ban some spiv from claiming to be a millionaire trader.
It’s up to the trading platforms to use social media influencers responsibly. Whilst either not allowing inexperienced customers to have an account (although this is probably a little unfair) or at least reducing the leverage available to them initially.
Even if the FCA were to insist that all affiliates and introducers were regulated, it wouldn’t stop offshore brokers