Is a friend or family member trying to get you involved in a money making scheme that seems too good to be true? One common way to promote a forex scam is to convince the victims to recruit more victims. The targets of the scam think that they’re doing their loved ones a favor by sharing a great opportunity. Unfortunately, their altruism leads to more people losing money, and ruined relationships. Learn how to spot the warning signs.
A Can’t-Miss Opportunity
All forms of trading scams rely on a certain amount of FOMO — the Fear of Missing Out. They use high-pressure tactics telling you that you need to sign up now or miss this big opportunity. When it’s a friend or family member, there’s extra pressure because you can believe that you can trust them.
One forex scam trick is to offer sign-up bonuses. This gives people even more incentive to try to recruit their friends and family. When a bonus is on the line, they’ll reach out even farther into their social network. This is how you get old school pals and distant cousins who you haven’t spoken to in years suddenly approaching you about a sure-fire way to make money.
Details are Hazy
Often, when trying to recruit you, your loved one may have a hard time explaining how, exactly, the scheme works. This is because the scammer who recruited them was intentionally vague on the details. If they provided an accurate description, it would be easy to see that it was a forex scam rather than a legitimate trading strategy.
It’s important to never get involved in any trading or investing scheme that you don’t understand. It is possible to make money with forex trading, but it involves learning how to read charts and understand market fundamentals. Some people get by with automated trading strategies, but these bots tend to either make small gains over a long period with a conservative strategy, or they take big risks which can lead to huge profits or devastating losses. Which brings us to the next point.
There Are No Guarantees in Trading
Pretty much every forex scam promises big rewards with little to no risk. They promise huge guaranteed returns. This creates pressure to invest more, with the idea that your large investment will be multiplied and create instant wealth. People have ruined themselves by wiping out their life savings or mortgaging their home to get involved with an investment scam.
All forms of trading carry a risk, which is why the first advice any legitimate broker will give you is to never commit more than you can afford to lose. Any broker or recruiter who tries to tell you that there’s no risk is lying to you, and probably trying to scam you.
Help is Available
Once someone has committed to a scam, it can be difficult to get them out. The scammer has likely told them that others will be jealous of their success, and has fed them lies to counter the common arguments. That said, you can try to show your loved one the facts and get them to see that they have been misled.
If someone realizes that they have been scammed, help is available. Special task forces track fraud and attempt to catch and punish scammers. Services exist to help victims get their money back. While falling for a scam is embarrassing, recovery is possible.