Forex Scams

What is a scam? – 

“Scam is a fraudulent business scheme” or “to deprive off by deceit” – (TheSage’s English Dictionary and Thesaurus)

Scam is synonymous with fraud. It is deception, make belief, trickery, pretense, cheating, e.t.c.

A lot of people have fallen one time or the other to scam deals knowingly and unknowingly. Some got out with partial loss, while others lost everything without a single recovery. Scam victims usually suffer unbearable psychological pains due to the level of trust built with the scammer and the loss incurred. 

Unfortunately any venture with high potential for money making is always alluring to scammers and Forex is one of those ventures. 

Scamming in Forex had been in existence right from when Forex began, only that it has taken a new dynamic dimension in this current era. Forex Scam is the act of fraudulently taking money from a client or customer with the intention of providing a rewarding service for the client or customer, which is not true. In some cases the services promised by the vendor could be rewarding or true but at the long run, a glitch occurs due to either poor design or failure in the service or product, and the vendor promises to make up for the loss and later on disappears after months of negotiations without any refunds. 

Examples of Forex scams include ponzi schemes, which is more prevalent in Forex Managed Account Schemes like PAMM, Pooled Asset Manager Scheme, and Pyramid Schemes. 

Let’s get this right, not all scam complaints are actually scams. A case scenario might look similar when it’s being matched with real scam cases. But when you look deeply into such complaints, you’ll find wrong perceptions and false alarms. 

A lot of inexperienced Forex Traders are quick to scream “I’ve been scammed” due to their level of knowledge in Forex. If you fail to follow the instructions of a product, and experience losses then that’s not a scam. For example when a signal service provider says “use default settings for accounts lower than $1000, and do not adjust the Money Management Settings otherwise you will get undesired results. However you’ll make little pips but on the long run your account will grow steadily”. Then if an inexperienced trader gets impatient or greedy, and ignores the warning by tweaking the settings in order to attain short term quick gain in his account, such a trader would unfortunately experiences an undesired loss to his/her account

Then let's assume the trader gets infuriated and sends series of complaints to the vendor about poor performances of the product and later request for a refund. When the vendor refuses based on the trader’s negligence, then a scam alarm is raised. Unfortunately this does not qualify for a scam case.

Every forex product has its threshold or required standards because they cannot be 100% perfect at all times. And usually most vendors state this caution or disclaimer notice on their website in order to protect users from unprecedented loss from market uncertainties. So it is the duty of a customer to keep to the product’s limits. When you go against it and face the undesirable consequences then asking for refunds would not work, and establishing a scam case would be extremely difficult.
When a trader uses a Forex product not designed for news trading or for a particular trading session or configures the settings against the design of the Forex Product and gets losses then the trader cannot claim he/she has been scammed. 

I’ve been scammed where can I get help?

See: File a scam complaint and get help; or
        Use our FXProbe (investigator) Services for guide on 
        handling a scam case.

To be continued....

In our next chapter of Forex Scams, we would reveal the Ten (10) Secrets of Detecting Scam Deals

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About Onyebuchim C. Obike
I am an IT specialist in Software Programming, Networking & Telecommunication. My quest for an alternative source of income led me into Forex since 2005. My encounter in Forex over the years made me to develop a site where traders can get reliable and effective Forex Resources & Tools, that would make them successful traders. I prefer combining Technical & Fundamental techniques in trading. Follow me on facebook: