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How to defend yourself against trading scams?

by Thomas
How to defend yourself against trading scams

I want to make a different post where the main theme is how to defend yourself against trading scams?

Data are alarming not me but Google Trends, if you visit the page and type in the search the keyword “trading” you see a chart with peaks in March 2020 and now due to a new lockdown is starting again.

What does that mean? Simply more and more people are attracted to trading and the complex world of financial markets with the hope of earning money.

Trading phenomenon   reminds me 15 years ago when I played Texan poker (Omaha my passion) on the Full Tilt platform, after a few years although poker had existed for years, all the people I knew had started playing with the same hope, with the time they zeroed their accounts.

In trading the movie is the same, statistics say that 8 out of 10 players lose (80% trading), you have read well it is the truth and never like this year I have seen the increase in users trading on any financial instrument (forex, Cfds, stocks etc). Not to mention the birth of new trading platforms that use a pounding advertisement (someone fees Robinhood for free) on social network channels such as Facebook, Instagram, Youtube with the idea of easy earnings in a short time, what makes me think is that too many people believe to solve problems with trading when in reality it loses a part of the savings if not everything.

This was just a premise to emphasize aggressive advertising by trading platforms or gurus trying to entice people to invest, the element that scares me are scams by unregulated platforms on the market at regulators (Sec, Consob).  (Not to mention gurus selling miracle courses or subscriptions to trading signals).

You have no idea how many people are scammed every day digitally (mail, ransomware) or by phone by cunning operators who aim to trick poor victims. But how do we defend ourselves?

Since complaining to the authority that you have been the victim of a scam is of little use (I will now explain why), it is important to know about small precautions to avoid being robbed of money. I told you earlier that reporting to the authorities is of little use in the event of fraud because these organisations build real ecosystems such as call centres located in foreign countries where controls are zero.

I am referring to countries outside the European Union such as Cyprus, Malta, Bulgaria, Romania, Albania, Gibraltar and Ireland, some of which are real tax havens where they benefit from reduced taxation and few administrative controls.

Specifically, customers are called by telephone and the operator is a real communication expert whose purpose is to empathize with the potential victim in order to create a phantom investment with the promise of great profits.

When a potential victim is selected there is a “torment” of phone calls until someone is having it, unfortunately if they fall into this game and invest the money it will be almost impossible to recover the money.

These are some precautions to avoid being the victim of a scam:

• Check the name of the company or website on Google (reviews, forums)

• Check if the broker’s name is present on the control authority’s website (Sec, Consob)

• Use only platforms or brokers authorized by the authorities

Check each broker’s reviews online before opening the account

A broker is not an investment advisor

Check the company’s tax location

I recommend not making (if you are not sure) bank transfers because (almost) impossible to recover but to use the credit card because companies such as Visa, Mastercard, American Express offer insurance in case of fraud.

If you have been the victim of a scam, simply contact the customer service of the cardholder and open a dispute with all the documentation, the hope is to be refunded within 120 days. Those who ask for payments through cryptocurrencies (Bitcoin etc…) are to be banned immediately without hesitation.

Be very careful the world is full of traps especially in moments of despair such as that of coronavirus where unscrupulous people try in every way to “sell dreams”.

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