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Forex Scams & How To Do Your Best To Avoid Them in 4 steps

How to avoid Forex Trading Scams, what to look out for

It is essential to watch out for forex scams when considering trading in the forex market, or when considering forex managed accounts.

Particularly if you are approached by an account manager, or you see a flashy ad promising amazing and guaranteed returns, you need to be particularly mindful. Usually it is better that you source your own account manager from a trusted broker to ensure that you are not falling into a trap.

There are many unregulated brokers and fraudsters out there, and it can be tricky to navigate and find safe managed forex accounts. As highlighted in other articles, doing your homework, investigating backgrounds, past experiences and with which forex regulator the broker is registered with is a must. There are various resources that are hosted by the regulators which show additional information on forex scams including this one by the FCA.

Forex Scams List Of 4 Warning Signs

In order to protect yourself as much as possible from forex scammers, and forex trading scams; you need to be diligent. Whilst this list is not exhaustive, these are 4 simple warning signs you can keep in mind when considering if what you are looking at belongs on the forex scams list.

  • No guarantees but death and taxes
  • No hesitation when it comes to regulation
  • Due diligence is definitely due vigilance
  • An approach out of the blue, it’s not for you
Forex Scams, close up of money
Photo by Tara Winstead on

Forex Scams List Warning 1 – Promised or guaranteed returns

Whichever the market being traded there are no guaranteed returns.

Guaranteed returns are savings accounts and not forex trading accounts. If you have a forex broker or an account manager that is offering a guaranteed return each year or month then we would advise you to consider very carefully. This can be an early warning sign that they could be running trading scams.

If returns and the markets were so easy to predict down to exact percentage returns, then why are they not already multi-billionaires and enjoying life on their own tropical island like Richard Branson?

Previous performance of a trader on a forex managed account is important as it will tell you how they have done in the past, it is however not an indication of future performance.

If someone is paying out fixed returns as a guarantee there is the potential of a ponzi scheme, a forex trading pyramid scheme, or something nefarious going. These involve new investor funds being used to pay the ‘profits’ of the earlier investor accounts.

No guarantees but death and taxes.

Forex Scams Warning 2 – Unregulated firms targeting regulated countries

Specific countries such as the UK, Australia, and the USA are more targeted by forex scammers but this is still a global issue. Any proper forex broker and account manager needs to abide by the local jurisdiction that they are operating in.

If a forex broker is marketing in either of these countries as they will need appropriate regulation, and this regulation prevents them approaching you without a request.

Any broker without FCA (or European equivalent), or ASIC regulation is likely marketing inappropriately, or at worst illegally, and in breach of local regulatory laws. Forex trading scams UK can be checked with the regulator on the checklist area below.

No hesitation when it comes to regulation.

Forex Scams Warning 3 – Strange payment method requests

Next on the forex scams list to watch is payment methods.

When you find a forex account manager that is requesting you deposit funds via cryptocurrencies, or some other form of untraceable payment, you should immediately be on alert. Any request for payment that is not giving you full confidence of legitimacy, it is always advised to check this out in detail beforehand.

Depositing into an account name which does not reflect the expected name of the broker or one of their listed operating entities is another red flag. You can check the listed entities usually in the footer of the official forex broker website, and then verify that back against those found with the regulator.

It is advised to check online for forex scams and reviews, search the name of the account manager and do your due diligence to ensure you are comfortable first and foremost.

A managed forex account is supposed to make it easier for you to navigate the forex markets profitably, not make it easier for a forex scammer to get hold of your hard earned money.

Due diligence is most definitely due vigilance.

Forex Scams Warning 4 – Someone approaches you with the offer of a lifetime

You have just been approached (usual via social media or a telephone call) out of the blue. It is the offer of a lifetime. An offer so good that it is hard to believe

Usually these scams are quite sophisticated, and the fraudster in these cases may even have a name that sounds remarkably similar to an established or trusted broker, or could even be a clone of an actual broker.

Regulated brokers cannot call you unless you have specifically requested them to, therefore an unexpected call is not a gift from above but rather a likely attempt to defraud from a forex scammer.

How to avoid Forex Scams Starts With Checking your local regulators’ site

If you are in doubt, check the regulatory body website and take a look for the name of the company that has contacted you. You will find a link to the FCA and ASIC warning sections here below that is easy to navigate.

There are similar lists on each of the local regulators that flag up either unauthorized people, companies and forex scam lists.

FCA Warnings
ASIC Warnings
CySEC Scam Warnings

It is likely that if a broker is targeting residents in your country, there will be a forex scam warning prepared. Be forewarned and do not take for granted if you do not see one that it is safe, as they may only have just started this particular scam. Trust your instincts.

An approach out of the blue, it’s not for you.

scam warning list
Photo by Anna Tarazevich on

Forex Scams Summary – Instagram, Twitter & Social Media Now On The List

The points above are not an exhaustive list of the forex scams to be aware of. There are many Forex Instagram scams, Twitter, Telegram and Facebook trading scams also that are targeting you in different ways than ever before.

Unfortunately, fraudsters are becoming more and more sophisticated, and are coming up with new ways to defraud the general public every day. Social Media seems to be a place where unfortunately some of the information gathered can be used by those wanting to cause harm. As unregulated platforms, it is very difficult to keep on top of the whole host of new topics that are being exploited without a dedicated compliance team.

In the visual world of social media, Instagram forex scams follow that trend and largely push fake screenshots of profits from non existent accounts; alongside aspirational images of someone sipping cocktails on the beach, or posing in front of a new supercar. These social media trading scams can target millions of people simultaneously, and create a really wide net of opportunity for forex fraudsters.

Gone are the days of them having to find your telephone number to call you, these viral Instagram forex scams can be pushed right in front of you; sometimes even from an unexpected source. Regardless of this increase sophistication from forex scammers, you can still counteract this.

It is always best to keep your wits about you, do not trust everything you are told or even see.

Even if information is coming from someone you know, they may also be an unwitting victim, on the receiving end themselves. Early Ponzi or pyramid type schemes do deliver returns to some, so it is possible to be completely unaware and have good intentions. There seems to be an increasing amount of forex pyramid scheme activity and cryptocurrency scams based on the increase of user queries so it is never safe to assume.

Some of the biggest financial scams in history have started off looking completely legitimate, so keep on your toes.

Always use regulated, safe and trusted trading platforms and you will be protected as much as possible by these regulators against any dishonesty.