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Over 50% of Forex scams find their victims on social media

  • Feb 21
    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.