Familiarizing yourself with the typical warning signs of an investment or trading scam could come as great help to avoid falling victim to some of these schemes. As any doctor will tell you, prevention will always be much easier than treatment.
There are several signs that might indicate that the firm or the individual you have been dealing with or are about to give your hard-earned money to are not “kosher”.
The importance of regulation
Some fraudsters will attempt to convince you by explaining how they are regulated and by whom. Beware! The scammers know how to appeal to your emotions and create a sense of urgency to make you commit to decisions you probably wouldn’t commit to without the pressure.
They might offer their own verification process, claiming that they are “internally” monitored or
regulated by a factitious entity like some “international broker association”.
Remember! In order for a company to be able to solicit financial/investment products to you, they must be registered and regulated by the regulatory body relevant to your country of residence.
For British citizens, for instance, they must have an FCA (Financial Conduct Authority) register number.
For Australians, the appropriate body is the ASIC – the Australian Securities and Investment Commission.
For EU members they must be registered under one of the recognized regulatory bodies that can be found by a simple google search of the phrase: “Regulators in the EU and European Economic area”.
In order to complete your due diligence, please phone the relevant regulatory body (where you reside) and ask them to verify whether or not the “broker” in question is registered with them. This should give you some peace of mind.
Location location location
A very common practice for the investment-scam type companies is to register their “label” (the trade name of the firm, the website) under a different holdings/marketing firm.
These holding companies are usually registered on some tax-sheltered pacific island where rule of law and ethical business behavior is a guideline rather than an obligation. Some examples we have seen include but are not limited to: Vanuatu, Isle Of Man, Virgin Islands, Estonia (not an island but still a hotspot for these scams), Marshall Islands, North Solomon Islands, St. Vincent & Grenadines and many more.
Hopefully you have spotted these important indications prior to parting with your money. If so, more power to you. However, if you have already been tricked by the scammers and your money was taken from you, please contact us immediately using the form below.
We offer a free consultation and assessment of the situation: