By Cedric Welsch – An online forex currency trading scam is hard to spot. Between 2001 and 2007, the Commodity Future Trading Commission investigated 26,000 claims from people who lost $460 million. These are just the people in the United States. Unscrupulous people prey on the hopes and dreams of individuals trying to make money or protecting their investment accounts.
There are seven different warning signals these investors need to pay attention to. The seven signals are investment account set up outside the country the investor lives in, constantly moving accounts to collect the commission, selling software guaranteed to make money, improperly managing accounts, false advertising, Ponzi schemes and indicating the forex market is a low risk and high profit investment.
The currency market is self regulated by the National Futures Association; members agree to abide by certain rules and regulations or their membership is terminated. In the United States the Commodity Futures Trading Commission has some oversight over currency brokers operating here. Other countries regulate the currency brokers operating within their borders; some have oversight and some do not.
One popular online forex currency trading scam is to have an investor submit funds by wire or certified check to an account in an unregulated or under regulated area. Once the funds are received, the funds become the property of the account holder and used for that account holders benefit. The primary concern of any investor should be the return of the investment account; the secondary concern is the return on this investment account.
Potential investors should carefully scrutinize any website of the company they are considering using. Scammers do not waste time setting up and maintaining professional looking web pages. Their web pages are quickly drafted and may contain spelling and grammar errors. Any second grade teacher will warn people about using “professionals” who do sloppy work; astute investors pay attention to that wise teacher’s advice.
There are many ways to find legitimate currency brokers. Most of these belong to professional organizations and have a good standing. They include this information in their advertising and on their website. Other investors in this market can provide valuable information.
Any investor who trusts a complete stranger with thousands of dollars needs to do their due diligence and investigate that currency brokerage. It is easier to spot an online forex currency trading scam by remaining alert and remembering that wise old saying, “If it sounds too good to be true, it is.”
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