We have seen too many Forex scams popping up left and right and felt that we had to let our Members and Followers know before they are caught with there pants down. In the prior post we covered the most notable IG MLM (Multi Level Marketing) Scams such as Wealth Generators. Here we want to talk about the even bigger scam in the Forex Industry. WE want to make this very clear, we do not trade Forex, we just wanted to send this PSA out to help anyone that might be thinking of trying it after seeing some of this ridiculous promises that you see online such as
In this scam the mark (person getting scam has convinced himself to trade Forex and is convinced to open a broker account with said Scam company, well call them Forex Scam Inc.
The Mark is the investor who is going to lose their money.
Forex Scam Inc. is the guy running the brokerage hustle.
Forex Scam Inc will had made absolutely insane claims about being about to make returns of 500% per year - guaranteed! Never mind that the best minds on Wall street have trouble making double digit returns consistently. The type of sucker they are looking for will be blinded by the bling. Forex Scam Inc markets itself specifically to the young and inexperienced investor. They will always rent (or "test drive") some expensive cars from dealerships and take lots of photos to back up there rags-to-riches claims. They market their website (starting with their made up success story). In this case, social media is perfect. Everyone loves to ask the Rich guy how to make money.
Now you're ready to get paid, and in lies the actual theft. Of course, you have to deposit real money to make trades for "real money". The Mark wires/paypals money to Forex Scam Inc. At that point, the money is gone. Poof. You lose. Game over. You just got hustled. Really, this is where you lost the game. From now on, it's just a matter of how Forex Scam Inc can best cover up the initial theft so you either don't realize it or don't say anything. The clock it ticking now, and they need to grab as much other cash as they can before the house of cards collapses.
But you can't just fold up shop after the first guy sends money. You would get exposed almost instantly in today's information age. No, you have to drag this on for months or even years for Forex Scam Inc to really be worthwhile. So back to our Mark who lets say just deposited $1000. Mr. Mark now goes about his merry way in his newly opened "real money account".
So here is the best part. The "real" money account is just a second demo account. It pulls live date from the markets, and it looks totally legit. Except when you buy and sell, it's all still imaginary money. Remember, it's their website, it's only drawing DATA from the forex service. It is VERY easy to make a demo account appear as real. You can trade to your hearts content with this new account. It may go up and down, up to a million dollars or down to Zero. How it happens, how many trades, how often how leveraged etc makes no difference. Let that sink in. There never was real money being traded on the market. What you thought was a real market account was in fact just another demo account disguised as a real one. Breathe. Read this paragraph again. This is the core of the scam.
There are only two results that can happen from this point. Hitting Zero, or attempting to cash out.
1) You lose all the money in your new "real money" account in your trading. If you quit, thats the end. More likely, Marks decide to "buy-in" again for another $1000 to try to recoup your losses. Typical gamblers complex. Forex Scam Inc will gladly encourage you. In fact, heck maybe they even have a promotional BONUS where they'll give you $200 FOR FREE! So you go back to trading your imaginary "real" money starting over with $1200 and you think this brokerage services is THE BEST and you tell all your buddies. Lots of people cycle through this, and eventually throw in the towel with Forex. Assume that in a fair system, 30% make money and 70% lose, that means more than half of all investors think they lost their investment on "the exchange" with no ill will towards Forex Scam Inc. Few will admit they were a shitty trader, but many will claim they "broke about even" and defend Forex Scan Inc. to the end. They never even find out that they got hustled. It is, the perfect con.
2) The second result is at some point before you lose it all - days, weeks, months later you decide to cash out your "investment". You try to withdraw your money. If it's a small amount, and they think you might re-invest again you might actually come back for more or if you're just "testing" the system, it's actually worth it to them to send it back. Asking for $100 returned out of $1000 deposited still leaves Forex Scam Inc up $900 to make payments on the mounting costs of living a lifestyle worthy of envy.
More than likely though, there will be some kind of "problem" with your account or your withdrawal amount. But of course it's not serious, just takes a few days, week, months, whatever before that will happened. Or maybe there is some kind of "investigation" into your account trading history. Or maybe there was a computer glitch, and your winning trade actually didn't go through. Pity.
And on and on. Eventually, hundreds (or thousands) of Marks will leave a trail of serious pissed people. Most people roll over a take it. They may huff and puff, but few actually go to the authorities. Especially when the Forex Scam Inc start threatening you.
This scam was typically used by fly-by-night poker sites, but Forex makes for bigger and easier marks, and it can be drawn out a very, very long time before the Mark (or group of Marks) figures out what is going on and that their money is gone.
Long story short. You want to gamble in the market highly leveraged? Find a brokerage owned by a company that's listed on the NYSE. Much better bet than some fly-by night brokerage. At lease you'll lose your money fair and square. Etrade TD Ameritrade, Scott Trade, etc. Dont get hustled folks!