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How to avoid forex trading scams - Arab News

How to avoid forex trading scams

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As the name suggests, the forex market deals in the trading of currencies. Like any other market, several factors, including political and economic stability and monetary policies, play a role in determining currency exchange rates.
Since it is largely a decentralized or over-the-counter market, speculation plays a crucial rule in the fluctuation of exchange rates.
Due to its nature and a lack of knowledge about the mechanisms of the market, people often fall victim to unscrupulous elements. People find trading in currencies highly lucrative, and in their attempt to make rapid gains can sometimes ignore the risks involved.
Fraudsters often use different methods to lure in people through direct telephone contact or through ads on various social media platforms making tall claims of ensuring overnight success in the trade.
There is a classic scenario for these swindling operations. The fraud starts when you receive a call from an unknown party posing as a representative of an investment company asking you to deposit a small amount and promising a quick financial return. This first transaction is usually successful and people do make gains.
Following the first transaction, your account manager will make investments on your behalf; some will yield good returns and some will not.
Once an individual becomes used to making quick money without any effort, a senior account manager from the company calls up with outlines of a larger investment plan with insurance and promising big profits. Once you invest a large sum of money, they show their true colors. Most of the time, after a while, they stop answering calls and emails.
Retrieval of funds from these fraudulent companies largely depends on the payment method used in financial transactions with them. If you have paid money using a credit card, contact your bank and report the transaction. If you have transferred the amount via any third party between you and the so-called forex company, you can file a lawsuit against the third party who acted on behalf of the company.
Forex ads that appear on various social media platforms have a huge impact on the youth. It is evident from the fact that many social media influencers promote different companies, and encourage their audience to invest and make money overnight.
In addition to these fraudsters, another phenomenon is emerging: Companies, institutions and even individuals claiming to help people recover money from swindlers in exchange for a fee. These people lack the legal authority to play this role.
Before entering the forex world, a person must ensure that the company he intends to deal with is on the list of licensed companies on the sites of the Saudi Arabian Monetary Agency (SAMA) and Capital Market Authority (CMA). An individual’s role is not only limited to protecting himself but extends to protecting society by reporting fraudsters using the official websites of SAMA and CMA.
Saudi Arabia has adopted measures to protect people from financial fraud. This includes the creation of a committee to raise awareness about unauthorized forex activity.

• Dimah Talal Alsharif is a Saudi legal counsel and a member of the International Association of Lawyers.

Twitter: @dimah_alsharif

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point-of-view

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https://www.arabnews.com/node/1694431

2020-06-23 20:08:58Z
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