By Nadeem Badshah
EXPERTS have warned investors about unauthorised traders in countries – including India – offering tips on social media for so-called “get-rich-quick” schemes.
Facebook and Snapchat are among the platforms where individuals are advertising their services to speculate on the changes in the currencies markets.
This newspaper found Facebook groups based in India promoting “forex trading” where people interested have to invest a minimum of $5,000.
Financial authorities have warned that some of the traders do not have the accreditation or qualifications to offer these services, which makes their activities illegal. And because they are based in south Asia, they are not covered by UK laws.
Some of the adverts luring people with south Asian heritage do not have a website or registered business and operate unchecked on social media platforms. The Action Fraud reporting centre said an estimated £27 million was lost from frauds involving cryptocurrencies and forex investment in 2018/19 with on average, victims scammed out of £14,600 each.
A spokesman for City of London Police, which runs Action Fraud, told Eastern Eye: “Stay safe when scrolling. Don’t assume it’s real; professional-looking websites, adverts or social media posts don’t always mean that an investment opportunity is genuine. Criminals can use the names of well-known brands or individuals to make their scams appear legitimate. Stay in control – avoid uninvited investment offers whether made on social media or over the phone.
“If you’re thinking about making an investment, thoroughly research the company first and consider getting independent advice.
“Make the right checks – firms providing regulated financial services must be authorised by the Financial Conduct Authority (FCA).”
The trend echoes 2013 Hollywood film The Wolf of Wall Street starring Leonardo DiCaprio.
Cryptoassests (crypto) and forex investment scam reports more than trebled to 1,800 cases in 2018. Officials say copy trading, advising someone how to trade or arranging trades for them is illegal in the UK.
And unauthorised forex scams are on the rise after the finance watchdog banned another type of trading called binary options last year, where an investors bets on whether an event will happen or not.
A City financial specialist, who wished to remain anonymous, told Eastern Eye she had come across so-called currency traders on Snapchat.
“Transferring money to any company or individual that is not registered and authorised to carry out such activities is extremely risky.
“There is a high chance that you will not see your money again. I have seen celebrities that endorse such schemes which might persuade young people to invest in these schemes.
“I would recommend that anyone who wishes to invest any money should check whether the company is registered and regulated by the FCA.”