Wednesday, March 16, 2011

What Are The Warning Signs Of Forex Fraud?

If you are solicited by a company that claims to trade foreign currencies and asks you to invest funds, you should be very careful. Watch out for the following warning signs:

1. Be wary of promises that sound too good to be true: “You can make six figure profits within a year; forex investments are very low risk; You can double your money.” Get-rich-quick schemes, including those involving foreign currency trading, tend to be frauds.

2. Be skeptical about unsolicited phone calls offering investments, especially those from out-of-state salespersons or companies that are unfamiliar.

3. Be especially cautious if you have acquired a large sum of cash recently and are looking for an investment vehicle. In particular, retirees with access to their retirement funds may be attractive targets for fraudulent operators. Getting your money back once it is gone can be difficult or impossible.

4. Be wary of high-pressure efforts to convince you to send or transfer cash immediately to the firm, via overnight delivery or the Internet.

5. Be smart about the money you do put at risk. Even when purchased through the most reputable dealer, forex investments are extremely risky. If you are tempted to invest, make sure you understand these products and above all, only invest what you can afford to lose. Don’t invest your rent money in a forex contract.

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