Over 50% of Forex scams find their victims on social media from wisepowder's blog
As the lockdown triggered by the Covid-19 pandemic wreak havoc on the
economy and impacting household income, a significant number of
desperate people have fallen victim to Forex fraud.To get more news
about WikiFX, you can visit wikifx official website.
The Financial Service Conduct Authority (FSCA) has issued several warnings about bad Forex brokers and scammers purpoting to be Forex traders, however, with the numerous digital platforms at their disposal it has become increasingly difficult for the non-discerning eye to tell which one is legit and which one isnt.
Members of the public should always check that an entity or individual is registered with the FSCA to provide Financial Advisory & Intermediary Services and what category of advice it is that the entity is registered to provide.
There are instances where persons are registered to provide basic advisory services for a low risk product and then offer services of a far more complex and risky nature.
“The FSCA again reminds consumers who wish to conduct financial services with an institution or person to check beforehand with the FSCA on either the toll free number (0800 110 443) or on the website www.fsca.co.za as to whether or not such institution or person is authorised to render financial services,” says the FSCA.
It is important to note that not all Forex traders are scammers, some are just bad brokers. Their crime was their poor handling of client funds which came at a huge cost to desperate people trying to earn a legitimate income.As is made clear from the chart above, 56.1 percent of people who reported being defrauded by a scammer or broker were first contacted via social media. Also made clear is that Fac*book and Instagram are by far the most popular hunting grounds for scammers and bad brokers.
Again, this is not particularly surprising. Fac*book‘s problems with content moderation are well-documented and are the subject of intense scrutiny from law-making bodies around the world. While most of this scrutiny is focused on Fac*book’s political content, we believe that lawmakers should also consider the financial damage inflicted on its users.
This data does highlight the level of trust that people place in relative strangers they meet on social media. Many of the complaints we receive detail the painful process that these victims go through. A recent complaint is a prime example of the method used by Fac*book scammers:
I came across the Fac*book posts of [REDACTED] who appeared to be a legit Forex broker. I then contacted him via Fac*book Messenger, and he informed me that I can deposit any amount I have from my account to their trading website [REDACTED].
He promised me that I will receive 500 percent profit after seven days of investing. On the day I was supposed to withdraw my profit, I got an email from [REDACTED], informing me that I have to make a deposit of $300 before I can withdraw. I raised this with [REDACTED] and he told me that he also didnt expect this.
Because I was desperate to get my money back, I deposited $288, with the hope that I will withdraw my profit but was later informed that the company charges commission and I would first have to deposit $450. As a result, I contacted [REDACTED] to inform him of my decision to demand a refund, since this trading company does not appear to be legit. He has since been ignoring my WhatsApp messages. I recently got an internship and I have to pay the money I invested back to the person I borrowed it from.
Reading through these complaints is a heart-breaking exercise, especially when so little can be done in majority of cases. While the FSCA does do its best to track down scammers, many of these people use fake names and are often based overseas. The anonymity provided by Fac*book – whether through its main platform or on Instagram – offers the perfect cover for many fraudsters and leaves victims with no recourse.
The Financial Service Conduct Authority (FSCA) has issued several warnings about bad Forex brokers and scammers purpoting to be Forex traders, however, with the numerous digital platforms at their disposal it has become increasingly difficult for the non-discerning eye to tell which one is legit and which one isnt.
Members of the public should always check that an entity or individual is registered with the FSCA to provide Financial Advisory & Intermediary Services and what category of advice it is that the entity is registered to provide.
There are instances where persons are registered to provide basic advisory services for a low risk product and then offer services of a far more complex and risky nature.
“The FSCA again reminds consumers who wish to conduct financial services with an institution or person to check beforehand with the FSCA on either the toll free number (0800 110 443) or on the website www.fsca.co.za as to whether or not such institution or person is authorised to render financial services,” says the FSCA.
It is important to note that not all Forex traders are scammers, some are just bad brokers. Their crime was their poor handling of client funds which came at a huge cost to desperate people trying to earn a legitimate income.As is made clear from the chart above, 56.1 percent of people who reported being defrauded by a scammer or broker were first contacted via social media. Also made clear is that Fac*book and Instagram are by far the most popular hunting grounds for scammers and bad brokers.
Again, this is not particularly surprising. Fac*book‘s problems with content moderation are well-documented and are the subject of intense scrutiny from law-making bodies around the world. While most of this scrutiny is focused on Fac*book’s political content, we believe that lawmakers should also consider the financial damage inflicted on its users.
This data does highlight the level of trust that people place in relative strangers they meet on social media. Many of the complaints we receive detail the painful process that these victims go through. A recent complaint is a prime example of the method used by Fac*book scammers:
I came across the Fac*book posts of [REDACTED] who appeared to be a legit Forex broker. I then contacted him via Fac*book Messenger, and he informed me that I can deposit any amount I have from my account to their trading website [REDACTED].
He promised me that I will receive 500 percent profit after seven days of investing. On the day I was supposed to withdraw my profit, I got an email from [REDACTED], informing me that I have to make a deposit of $300 before I can withdraw. I raised this with [REDACTED] and he told me that he also didnt expect this.
Because I was desperate to get my money back, I deposited $288, with the hope that I will withdraw my profit but was later informed that the company charges commission and I would first have to deposit $450. As a result, I contacted [REDACTED] to inform him of my decision to demand a refund, since this trading company does not appear to be legit. He has since been ignoring my WhatsApp messages. I recently got an internship and I have to pay the money I invested back to the person I borrowed it from.
Reading through these complaints is a heart-breaking exercise, especially when so little can be done in majority of cases. While the FSCA does do its best to track down scammers, many of these people use fake names and are often based overseas. The anonymity provided by Fac*book – whether through its main platform or on Instagram – offers the perfect cover for many fraudsters and leaves victims with no recourse.
The Wall