Wolves Behind Keyboards and Monitors: Social Media Forex Scams and How to Avoid Them
Did you know? There are 3.78 billion active social media users reported worldwide in 2021, which amounts to 48 percent of the existing world population. Reportedly, an average of 2.5 hours per day is spent on social media by users worldwide. Provided the magnitude of the social media industry, there are good and bad attributes.
Considering the large pool of potential victims, scammers have been targeting social media platforms lately. And with four out of five top most used platforms belonging to Facebook Inc., no prizes for guessing where most scammers are. Facebook, Instagram, WhatsApp, and Facebook Messenger are the commonly used platforms by scammers, forex or otherwise.
A report revealed that around 35 percent of scammers found their victims on Facebook, while 20 percent of them preyed on Instagram. That's a mind boggling figure 50 percent of forex scams shared by just two social media platforms owned by a single entity.
It wasn't too long ago that scammers encouraged their victims to go on a website to sign up for an account to dupe them further. With social media, the scams have been reduced to just one step, and that's precisely what makes them dangerous. Here we will acquaint you with the dangers of social media forex scams and how to avoid them.
Why is Social Media Forex Scams Gaining Traction?
As mentioned just above, Social Media is convenient. Social media forex scams are unsuspecting and differ in how they offer urgent deals requiring immediate action. Often, the sense of haste to get the deal throws oversight out of the window as the victim sends payments directly to the fake broker's account.
Moreover, social media scams save fraudsters the trouble of going through the elaborate process of setting up a fake trading platform or a website. All they need to do is sign up for the free social media account and find some unsuspecting victim to lure with absurd promises like double the return in a week if they send money right away.
The tumultuous rise in social media forex scams is directly connected to the ongoing pandemic and the resulting lockdown. With almost everyone stuck at home, social media usage has increased, and it seems that everyone is online these days.
Most of these individuals are working from home, have lost their jobs, or have been unemployed during the pandemic. Forex scammers prey on vulnerable people and are more likely to fall for a scheme due to uncertainty of the future or to make quick money.
What is the Modus Operandi of Social Media Forex Scams?
If you search online, you'll come across hundreds of social media forex trading scams, with the most ridiculous one being romance scams. While the approach might be different for these scams, they all have a common modus operandi, a pattern. Before we delve further, here's a pearl of wisdom for you. Social Media is not the place to find a broker, and you must always do your due diligence.
The scam begins with a fake broker posting about some ridiculously good forex opportunity that promises massive returns on investment in a very short time. They will then start messaging potential victims about how they can double or triple their initial investment. However, they must act fast, or the opportunity will vanish. The victim will then be asked for payment through cryptocurrency in most cases, which is untraceable and irreversible.
Once the transaction goes through, the ball is in the scammer's court. They will either straight up ghost the victim or give excuses like the trade failed and the investment has gone kaput. Or, they will try to trick more money by saying that the trade is doing very well, and by depositing more money, they can further multiply their returns.
If they ask for a withdrawal, the victim will be told about a massive minimum deposit for releasing funds or an enormous sum of money in fees. In a nutshell, the scammer will sit on the original investment until the person keeps paying fees or making more deposits. The tune changes when it comes to returning the money; they will cut all communications or start giving excuses.
How to Avoid Social Media Forex Scams?
The best way to avoid social media forex scams is to avoid them. Simply speaking, if a broker is not giving out their details or a phone number and using the social media platform as their primary mode of communication, consider it a red flag.
If you take a moment to pause when you are approached with one such urgent, once-in-a-lifetime trading opportunity and check the page that approaches you, you'll find no information at all. This makes it very hard to do any sort of research on the broker.
It's therefore advised that you must only deal with and trust a regulated forex broker. The regulated forex brokers have registered themselves with the trading regulatory bodies and complied with the local regulations. This makes it easier to file a complaint and prompt a disciplinary against the broker if scammed. This is the easiest way to spot a scammer; they are not regulated and don't have any trading license.
Next up, you should avoid any sort of messages that claim to offer unbelievable and guaranteed returns, which is practically impossible in a volatile market like foreign exchange. The next red flag to spot is asking for payments through cryptocurrencies or wire bank transfers. While cryptos are harder to trace, wire bank transfers are hard to recover.
What Should You Do If You Have Already Been Targeted?
Due to the rushed nature of social media forex scams and lucrative schemes, it's very easy to fall prey. In case you are already a victim, brace yourself and don't lose hope. One of the best ways to recover the lost money is confronting the broker and trying to get a refund or filing a chargeback.
A chargeback involves returning the money to the payer after deducting it from the receiver's account. This is the best method because if the banks find the chargeback claim valid, the amount will be removed and returned to the victim without informing the scammer, thus reducing their chance to transfer the amount.
A chargeback is an elaborate process, and this forex chargeback guide by Payback is a worthwhile read. If you're not confident in your ability to file a chargeback, you can hire a recovery service like the one mentioned above and have them handle it for you.
By now, we are confident that you can easily spot a social media forex scam from a distance and give it a wide berth. It's best to take the more conventional route of trading with an actual broker online with a credible website and documentation than some random broker offering the deal of your life on a social media platform of all places.