Most people have heard of forex scams and have probably wondered how they work. Scammers use high promises and pressure to lure unsuspecting investors. They usually ask for a small upfront investment, and promise returns on their investment. They will encourage you to convince your friends to invest, and once they have enough money, they vanish with it. Unfortunately, most scams are nothing more than a sham. There are a few warning signs of a scam.
Scammers use the Internet and marketing methods to try to attract new investors. The most common tactic is email and marketing. They offer attractive investment proposals that promise high rewards with little effort. Scammers will use aggressive and persistent techniques to win your trust. They may even try to reach you through the telephone, which is considered cold calling. Don’t fall for this practice. It’s never a good idea to provide your financial information over the phone.
Another common scam is managed accounts. These scams involve a trader taking money from an investor and not investing it. In these cases, the fake trader will use the stolen money to buy luxury items. In many instances, the victims are unable to recover their losses. A good way to avoid this type of Forex scam is to invest in a broker that charges a fixed commission. Often, the commissions are higher than normal, so you have to be extra vigilant in evaluating your broker.