By Nadeem Badshah
EXPERTS have warned investors about unauthorized traders in countries – including India – with tips on social media for so-called “get-rich-quick” schemes.
Facebook and Snapchat are among the platforms where individuals advertise their services to speculate on the changes in the foreign exchange markets.
This newspaper found Facebook groups based in India promoting “forex trading” where interested people must invest at least $ 5,000.
Financial authorities have warned that some traders do not have accreditation or qualifications to offer these services, making their activities illegal. And because they are based in South Asia, they are not covered by UK law.
Some of the ads that lure people with South Asian heritage do not have a website or registered business and do not feature marked on social media platforms. Reporting center Action Fraud said an estimated £ 27 million was lost from fraud involving cryptocurrencies and forex investments in 2018/19, with average victims being scammed out of £ 14,600 each.
A spokesman for the City of London Police operating Action Fraud told Eastern eye: “Stay safe as you scroll. Don’t assume it’s real; Professional looking websites, ads or posts on social media do not always mean that an investment opportunity is real. Criminals can use the names of well-known brands or individuals to make their scams seem legitimate. Keep in control – Avoid uninvited investment offers, whether made on social media or over the phone.
“If you are considering making an investment, you should first investigate the company thoroughly and consider getting independent advice.
“Make the right checks – companies that provide regulated financial services must be approved by the Financial Conduct Authority (FCA).”
The trend repeats the 2013 Hollywood movie The Wolf of Wall Street starring Leonardo DiCaprio.
Cryptoassests (crypto) and forex investment fraud report more than tripled to 1,800 cases in 2018. Officials say that copy trading, advising someone how to trade or arranging trades for them, is illegal in the UK.
And unauthorized forex scams are rising after the financial watchdog banned another type of trade called binary options last year, with an investor betting whether an event will happen or not.
A City Finance Secretary who wanted to remain anonymous told Eastern eye she encountered so-called currency traders on Snapchat.
“Transferring money to any company or individual who is not registered and authorized to carry out such activities is extremely risky.
“There’s a good chance you won’t see your money again. I have seen celebrities supporting such schemes that may persuade young people to invest in these schemes.
“I would recommend that anyone who wants to invest money should check if the business is registered and regulated by the FCA.”