It is always a difficult pill to swallow when one loses money, especially to fraudsters. The feeling of anger and confusion is one that only some form of compensation can make better. With Forex trading, as with almost everything that involves the exchange of money, there are scammers and Forex scams everywhere. It is a good thing then that Forex funds recovery is a thing.
These individuals or companies that scam the unsuspecting usually make use of social media to find victims. They put up adverts that show some ridiculously good Forex contracts or lucrative employment positions in Forex trading companies. These deals usually seem too good to be true, and they usually are.
The first step in the recovery of your funds is to understand how these scams work and how to recognize them in future deals. To do this, you have to know how Forex contracts work.
What are Forex Contracts and how do scammers work?
Forex contracts are basically rights to purchase or sell a certain quantity of foreign currency at a particular fixed price in US dollars. The exchange rate of the currency fluctuates almost at a daily rate, which means that the profit and losses accrued from your investment also fluctuate.
Forex markets are probably one of the most active in the world. Large volumes are traded constantly by companies, governments, large banks, and so on. This means that losses can accumulate quite quickly and can take out all of an investor’s money in one fell swoop.
The promises of ten or hundredfold returns from investing little amounts with little or no risks at all that these scammers make are not always as easy or achievable as they sound. What happens most times is that the money that is invested is diverted for the scammer’s personal use
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5 Steps to take for your Forex Funds Recovery
If you have been taken in by a Forex scam, there are still a few ways you can recoup your loss. Here are some of them:
Get together with your broker to figure out how it happened
It is possible that as a Forex trader, you may make some bad decisions concerning your trading strategy. This could be due to not having a proper insight into knowing how the market works. In cases like this, it is usually easier to just blame the broker and have it done with.
A more productive approach to this particular issue would be to have a sit down with the broker and figure out where everything went wrong. It could just be a case of miscommunication between the two parties. Before this meeting happens, it is prudent to go there prepared.
Gather all the data and information that you can including trade logs, bank statements, any paper trail that is available. All these documents will help your argument regarding being a victim of fraud. After this, you can also send an email to make sure that the discussions are made official and there is a trail.
If your broker can explain and be convincing about what happened, then both of you can come to an agreement. On the other hand, if the broker cannot provide a proper reason and you are confident that something fraudulent had occurred, then you could let them know you are escalating the issue to the relevant authorities. Fraudulent brokers would not want that to happen, so they would usually refund the money. It is also possible for the broker to cut all communications and go dark. In this instance, then you go for more drastic options.
Naming and shaming
This is the next thing to do, if the broker absconds, is to make the matter public. The idea is to name and shame them on any popular Forex trading platform like Forex Forum or MT5 Forum. These forums are popular among brokers and traders, and the reputation of many brokers has been ruined because of consistent negative reviews on such platforms.
The ratings and reviews on platforms like this are quite important to most brokers. Some even employ people to manage their reputations on those platforms. Mentioning a broker’s name and providing evidence on such platforms could result in the broker being forced to return the money.
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File Chargeback Request with Credit Card Provider
This option is open to you if you made a payment using a credit or debit card. You can file for a chargeback from your provider. This is probably the most effective method to get your money back after a Forex scam.
You can start this process by filing a claim with the issuing bank regarding that particular transaction. The bank will, of course, do its own due diligence to determine if the claim is valid. When this is done and the claim is verified, then your bank will pass on the claim to the broker’s bank.
What happens next is that the broker gets a notification about the dispute and that action has already been taken to refund the money. This process can be initiated on your own or you can employ the services of a professional chargeback company.
File a complaint with the Broker’s Financial Institution
Banks and other financial institutions take their reputation seriously. That is one of the reasons they make potential business account holders go through several hoops before they can open an account. They want to be sure that they are accepting respectable businesses and individuals into their banks. They usually have strict rules about blocking fraudulent customers.
You can use this to your advantage if a broker has successfully scammed you. All you have to do is report the fraud at the broker’s bank, providing details of the transactions and any other proof that you have. This may end up in the broker returning your money if they are contacted by the bank.
Go to the Trade Regulators in your Region
There are trading regulatory bodies that oversee trading activities in their region. These bodies take fraud cases seriously, and the recourse available to any victim of Forex trading scams would be to report to these bodies and claim compensation provided all the evidence needed is in place.
In the United States, the National Futures Association (NFA) is the primary regulatory authority for Forex trading in the country. They do this alongside the Commodity Futures Trading Commission (CFTC).
Filing a complaint with any of these bodies will set into motion a series of events that will start with the regulatory body getting in touch with the broker and possibly ends with the broker returning the money. The broker faces suspension of their license or having to pay a huge fine if the matter is not resolved.
As an investor looking to make some money from the Forex market, it is your duty to do due diligence and choose your brokers wisely. Always look for an individual with experience, who has a good knowledge of the market and is properly licensed, and has the right documentation.
A good place to start your research would be to go online to the CFTC website where they can obtain information about anyone registered with the organization including any complaints lodged against them. You can also find out if a person is registered with the NFA by calling their number.
There are also some pointers that might help you determine if a company or a person is fraudulent. Here are some of them:
- Be very wary of promises that sound way too good to be true, they probably are. statements like; “Forex investment is really low risk”, or “you can make six-figure investments in just one year!”. These are all red flags that you should be mindful of.
- Be mindful of unsolicited calls from unfamiliar companies offering investment opportunities, especially those that call from out of state.
- If you have recently come into some huge amount of money and are looking to invest, you should be extra careful. You could constitute an attractive target for fraudsters and it would be hard to recover your money after investing.
- Even when you have done your due diligence and have found a trustworthy investment broker, be smart with the amount of money you put up. Forex investments are risky, and a lot can go wrong. Invest only what you can do without, don’t invest money that you need for something important.
On a whole, be smart with your money and invest in only products you are absolutely sure of. And if you get scammed, you have a few options open to you to recover what you have lost.
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