Looking for a safe investment? Don't fall for promises of fast cash by investing in foreign currency scams.
How the Scam Works:
The advertisement promises an easy investment with high return and low risk. With only $5,000 (or a similar sum), you could purchase Iraqi Dinar, Vietnamese Dong or, most recently, the Egyptian Pound. When those governments revalue their currencies, increasing their worth against the dollar, you just sell your Dinar, Dongs or Pounds and cash in.
It sounds like a great investment, but it's a scam. The hoax is so appealing because, unlike previous forex (foreign currency exchange) scams where victims were given a bogus "receipt" for their money, you can actually purchase these currencies. The problem is that they will be very difficult to sell, and it's extremely unlikely they will ever significantly increase in value. Many experts have explained why the investment promises are false.
The Iraqi Dinar is the most popular currency used for the this scam. But given recent political upheaval in Egypt and the growth of the Vietnamese economy, these currencies are also gaining traction.
If you believe you are a victim of foreign exchange fraud, please file a complaint with the US Commodity Futures Trading Commission either through their website or by calling 866.366.2382.
Warning Signs of Forex Fraud:
Watch out for these red flags when considering a forex market investment. Even at its best, this market is volatile and high risk. Don't invest money that you can't afford to lose.
- Watch for promises of large profits... but little information. Always get as much background as you can about a firm or individual's investment track record. Then, verify that information. Don't rely on the recommendations of friends or relatives.
- Be wary of promises of no financial risk. Be suspicious if a firm or individual says there is little risk. The written risk disclosure statement is not routine formality. Be sure to read it thoroughly.
- Retiring soon? Inheriting money? Those looking for investment opportunities are particularly attractive to scammers.
- Don't be wowed by buzz words: Scammers often throw around terminology to enhance their claim. For example, they often claim to trade of the "interbank market." Don't fall for it.
- Hang up on unsolicited telephone calls about investing. Be skeptical if someone you don't know calls you about investment opportunities.
- Don't fall for high-pressure tactics. Be very cautious if someone tries to convince you to send money immediately by overnight express or wire transfer.
For More Information
Read the US Commodity Futures Trading Commission's warning on foreign currency trading fraud.
Check out BBB Smart Investing for more information on how to avoid investment scams.
To find out more about scams, check out BBB Scam Stopper.
This Scam Alert has been sponsored by Western Union.