Last week, the Financial Sector Conduct Authority (FSCA) warned the South African public about a trading company that promises investors returns of up to 40% per week, despite not being registered with the FSCA and not being allowed to provide financial services to the public.
Unfortunately, as the numbers of traders increase annually, scammers also come up with tricks to lure unsuspecting investors. This is why it is vital to be knowledgeable about forex trading before going into it.
According to the latest survey report from global forex trading platform, Octa, 82.4% of people dealing in forex trading have been exposed to one or more of various types of forex scams. The research has also found that 41.9% of the respondents got scammed due to their expectation of easy money.
Most traders come across fraudulent offers on emails, advertising, blogs, social media influencers and platforms, SMS, phone calls, and WhatsApp or Telegram.
Scammers frequently target novice traders, exploiting their lack of experience and understanding of the market. As a global forex broker with over a decade of experience in the industry, Octa highlights some of the most common tactics scammers use and how traders can protect themselves.
Here are red flags to watch for:
- Guaranteed profits: No legitimate broker will promise a fixed or guaranteed profit.
- Unregulated brokers: Always verify whether a broker is registered with the FSCA.
- Unsolicited contact: Be cautious of brokers or individuals contacting you out of the blue via social media, WhatsApp, or Telegram. Legitimate brokers do not solicit clients in this manner.
- Pressure tactics: Scammers often pressure traders to act quickly, claiming that an ‘exclusive’ opportunity is about to expire.
Octa recommends following these practical steps to stay safe:
- Verifying email addresses: Most fraudulent offers come in junk/spam mail. If you are suspicious about an email address, you can put it into a search engine to confirm.
- Downloading apps from official stores: It is important to download a trading app from official stores. Downloading from an unverified app can expose your data without your knowledge.
- Avoid granting access to any third party: Never tell anyone confidential information about your account. Forex brokers will never ask for personal details.
- Use a VPN: This will help to ensure that sensitive data is safe and will provide an extra layer of privacy for all of your online activities.
- Update your apps: By updating your app, you are plugging every security loophole and upgrading the security features of that app. Your application can only be up-to-date when you install the latest product updates.
- Avoid visiting suspicious URLs: Cross-check how the company’s name is spelt, and the format of the URL before filling out forms. This is essential to ensure that the hyperlink does not contain attempts to steal your personal information.
- Logging into the official website directly: Avoid opening email links or attachments from banks, apps, or portals, especially if the sender insists. Instead, access the official website to complete any required actions.
- Not granting permission to track: Be careful about granting access permission to apps on your phone. This can compromise your security. Minimise the likelihood of data breaches by regularly updating permission settings on your app.
- Most importantly, never share your password, PIN, or account credentials with anyone: It is also important to create complex passwords. The stronger your password, the more protected your data will be from scammers.
Education is vital in trading
Whether you are a beginner or an expert trader, do your research and ensure you choose an authentic forex trading platform to mitigate against forex scams.
