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Forex Trading Scams

This is an investment scam that probes investors into putting money into the scam with the promise that after a specific period indicated, it will come with interest of up to 50% or more. These are usually short periods such as after two weeks. The ideology brought out is that the money is being invested yet, early investors are being paid out from money of late investors. Eventually the scam crumbles together with invested money of victims.

How does this scam work?

Scammers set up a scam that they portray to the public that it is authentic. They set up a structure that gives ridiculously high returns over short period of time. Usually the pitch note is like “you get 100 percent profit if you keep your money with us for a month and 50% profit if you keep it with us for two weeks”. The prior is just an example. They indicate that the investments are into the mining sector, forex trading or any other practice that they know brings high returns. In actual essence there is no investment that they will be doing that holds the claims of returns that they will be promising the victims and potential victims. The scammers run the scam for a specific period that they would have planned, that is unless they are caught or their scam by officials or people stop investing in the scam. That is when the structure collapses, together with money of investors. What usually happens is that the early investors get their returns and some benefit positively from it. Due to them gaining from the scam, they usually inform others of where they are getting money and thus attracts more people into investing into the scam. Let’s say that you invest US$ 100 and after two weeks you receive your US $150. This is a good return on investment, and you tell your cousin about it. They also invest and they tell their friends and family. Eventually you get carried away and invest a larger sum of money such as US$ 1,000. The same involves other people who you don’t know. The scammers will be spending the money and living large whilst spending the invested money. When the structure crashes, you might not lose anything, or you might have gained more than you would have lost over the duration of the scam. However, your friends, family, and people you referred the scam to might be defrauded and that is the nature of Ponzi schemes. These types of scams have significant impact and may people lose thousands and millions to them. They seem as get rick quick scams and that is the nature and appearance of many schemes. There are a lot of Ponzi schemes that have been orchestrated within boundaries.

Red flags or Warning signs

How to protect yourself

Have you ever been scammed?

  • Do you think that you have ever been scammed? If you have, you can help the next person and guide them from not being a victim by reporting this scam.
  • Reporting this scam can help your friends and family.
  • Also, seek help and guidance on how to avoid being scammed.
  • In case you have issued your banking details or any other personal information that can get your bank account defrauded, contact your bank immediately.

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