Experts Warn of Forex Scams, Lists Things to Watch Out for
- An Instagram influencer who duped victims of over $4.6 million through forex trade has alerted experts to providing tips on how to spot future scams
- According to reports, Garvin Sigh lured his victims via a flashy lifestyle and convinced them to invest in a Ponzi company called Infinox
- Experts warn that man scammers employ some trick in hoodwinking their victims into investing in bogus schemes
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With Nigeria currently battling acute forex scarcity, experts have warned that scammers will take advantage of the loophole and exploit vulnerable Nigerians.
There were about 260 million forex scams worldwide in 2021, and the total losses added to about $42.5 billion.
Countries around duped by forex scammers
According to analysts, the loss is equal to the total GDP of Bolivia in 2021. Reports say that fraudsters scammed victims of over $17 500 in the last financial year. Most of those duped were males in their 20s and 30s.
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The amount was triple of over 1,800 scams in 2020.
Most scams happened in Brazil in 2021, with a total amount estimated at 125 410 052 frauds across the South American country. India saw the highest loss of money per individual at $21.92 billion.
Portugal is one of the countries in the world with the least number of forex frauds, totalling around $1.38 million, while Germany saw the highest loss per person at $38,27, with a total loss put at $3.19 billion.
Over 95,000 people lost a cumulative sum of $800 million in frauds or hacks caused by social media platforms last year, per a Federal Trade Commission report.
Influencer scams victims of millions
One of the biggest scams in recent times is connected to an Instagram influencer called Garvin Sign, who induced more than 1,000 people to his copy trading scheme and lost $4.61 million.
He persuaded the victims by flaunting his flashy lifestyle and making trading look simple.
He told victims that their money was invested via a brokerage firm called Infinox, registered in the Bahamas and not subject to US regulators.
FX trader and senior analysts at the International broker site, BrokerChoser gives tips for avoiding forex scams.
- Warning lists: This list of companies operating without permission or running scams. These lists are provided, for example, by FCA, FINRA or the RED list by CFTC.
- Regulation: Always check the broker's regulation, and strive for top-tier regulations such as FCA or SEC.
- Webpage: Check the quality of the website. A bad quality might be a sign of a scam broker.
- Bogus offerings: High bonuses for account opening is a red flag. They can offer guaranteed profits or promise more than 10% profits. Likewise, trading courses, Robo-advisors, PAMM accounts or signal selling services with unreal profits are probably scams.
- Withdrawal: More than 5% withdrawal cost or discouraging investors from withdrawing money is always a bad sign.
- Contact: No contact or non-professional emails like @gmail.com. Check the contact list on the webpage of FCA.
- Market makers: In this case, the broker has a dealing desk, and clients trade directly with the FX broker; therefore, there is a conflict of interest—Double-check whether these brokers had been penalized for requoting or illegal practices like asymmetric slippage.
- Recovery scammer: They promise to recover the money you lost to a scammer and used to ask people to pay before providing any service.
- Offering binary options: Binary options are banned by regulators in many jurisdictions as a form of stakes. Brokers offering it are probably scams.
- Ponzi scheme: This type of investment fraud pays existing investors with funds collected from new investors. It is characterized by offering high FX returns with low or no risk.
Instagram Influencer Papaya Acquires Luxury Mansion 2 Months After Buying Benz Worth Millions of Naira
Recall that Legit.ng reported that 2021 is still doing wonders for a popular Instagram brand influencer, Abike aka Papaya as she recently joined the list of luxury homeowners.
Just two months after splurging money on a Benz SUV, Papaya decided to top the year with a beautiful house.
Taking to her Instagram page, the young lady gave thanks to God as she showed off her multi-million naira home.