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Business / Finance

Five rules: how to avoid scams in Forex

Banki.ru: themes of the day 27.02.2019 at 21:06

Banking and financial news on the website Banki.ru

Despite the efforts of the regulator trying to close citizens access to financial pyramids and Forex market, the illegals live and thrive. How not to fall into the trap of unscrupulous financiers?

the expulsion from the Forex market of a few large companies, it seems, did not satisfy the Bank staff of Russia. Now they propose to close access to ordinary citizens. To trade currency pairs will be available only to qualified investors. Will either have to obtain a special certificate, or to show that you have assets of 10 million rubles. As recently stated by Deputy Chairman of the Central Bank Vladimir Chistyukhin, this rule is necessary because of the law "About Forex" to protect the public is not enough. He did not rule out that pass the exam will have and those who already have an account with a Forex company.

the New restrictions for investors, obviously, will lead to a new surge of unfair practices in the Forex market. After all, to forbid to use the services of unlicensed companies can not the Central Bank. Now, according to the Association of Forex dealers (AFD), the clients of the companies licensed by the national regulator, are about 6.1 million people. While the number of those who deal with illegal immigrants and offshore dealers, is estimated at half a million. Last year, the Central Bank has identified 223 of the website of illegal Forex dealers, and just in the last two years — more than 350 sites.

recognized As the head of AFD Eugene Masharov, the intention of the regulator is understandable, but to limit the number of those citizens who transferred their money to offshore companies, it is very difficult, if not impossible. "It is not in the competence and not to the extent of the Central Bank, neither the legislature nor any other Agency," he says, adding that instead of one locked resource see two-three clone.

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Offer you a few rules that may help avoid the nets of swindlers and not to lose their savings.

the first Rule: a license is not a reason for Dating

the Lack of Russian license is not a reason to believe a fraudulent company. According to the law, so the Forex dealers not to conduct marketing activities to attract Russian investors, but no one can forbid a citizen to make a contract online with a foreign market participant. However, whether the company is licensed by a foreign regulator? If the UK company, the permission shall be issued by the office of financial supervision the FSA in Europe — the European Agency for the securities market (ESMA). Cyprus license issued by the securities Commission and exchange Commission CySEC.

But, for example, the presence of the Cyprus licence gives the right to offer the services of the Forex-dealer in other jurisdictions (outside of Europe). Introduced such a ban, local lawmakers in 2018. Similar restrictions exist in other offshore countries. For example, in the UK offshore is not provided separately, the regulation of participants of the Forex market, a company with such a "residence" have no right to claim that they have a license. "Often the scammers are registering companies in offshore zones, where customers are not protected legally. For example, in Saint Vincent and the Grenadines," says operations Director Just2Trade Alexey Dolzhenkov.

Another indication that leads the company is playing fair or not, membership in the Financial Commission (The Financial Commission), which considers disputes between the trader and the company and also maintains on its website a black list of unfair participants.

the second Rule is do not invest in the "dangerous products"

to interest the customer, scammers often resort to the substitution of concepts: for example, under the form of investment in shares and the exchange offer CFDs. It's just a contract with a company that you can repay the income, if the underlying asset will rise in price. Technically you don't own anything, and get quotes from the terminal the Forex dealer. Of course, nobody is going to warn you that in Russia CFD is actually illegal. Therefore, in case of any problems, to support the financial authorities should not count.

Another "dangerous product" — binary currency options, or bets on whether it will increase the exchange rate of one currency against another or, on the contrary, will fall. They, like CFD, is the law. Through the use of leverage, the investor with even a small amount can increase the amount of bet and thus increase the income. The actual financial transaction does not occur, you simply move, like in a casino. In case of failure, it can lead to total loss of the funds in the account, the Forex dealer. This is actively used by scammers, often playing against the client or acting in other ways, introducing him at a loss. In the jargon this is called "lose your Deposit".

Rule three: speed — the key to stealing

the Most important thing for dishonest Forex dealer — fast and most easy ways to get the client and his money. So, for example, in contrast to the "right" dealer, which requires you to sign a framework agreement governing the relationship with the customer, the fraudsters are often limited to the contract-offer. No documents provided that the investor is not required. "This is one of the signs that you are dealing with potential fraud," — warns Alexey Dolzhenkov. According to him, the licensed party enters into a contract with the mandatory provision by the client of documents confirming the identity and place of residence. If necessary, he can even inquire about the source of income if a client intends to invest a substantial amount.

a Sign that is in front of you scammers can be and the system input/output of money from the Deposit. By law, the money must be on a nominal dealer account opened in a Russian Bank. However, practice shows that the crooks are ignoring this requirement by posting accounts in dubious financial institutions. The client can offer to recharge with e-wallet or even to Deposit money in cash. So keep track of where to get these funds is very difficult. As well as to return the money back. As a rule, on various forums you can find a lot of information about that particular dealer delays withdrawals. This is a direct indication of the dishonesty of the company or that she had financial problems. "Normal transparent Forex company of the conditions of withdrawal of funds must be strictly regulated for the period of withdrawal and commissions," said Dolzhenkov.

the fourth Rule: not all boards are equally good

to push an inexperienced investor to make a risky transaction, one advertising and guarantees high profitability is not enough. So the scammers in the Forex market are often disguised as various training centres and offer additional services. For example, you can offer "seasoned trader", who for a small Commission will develop a trading strategy. No license for trust management of the company often is not. The lawyer Evgeny Moskalenko advises to refuse the services of companies that offer to sign two agreements: the client and Advisory services.

the Russian jurisdiction Forex dealer has exclusivity activities. That is, he has no right to control clients ' money or to provide training or perform other activities. It is clear that offshore players these rules may not be followed. "As a rule, most of the stories with the transfer of accounts in the Forex market in the management of end in tears — "drain" of deposits and the disappearance of the "governors", — said General Director of "PSB-Forex" Vladislav Kopecky.

Rule five: don't play without the rules

Even if in the beginning as a result of several successful transactions, your account has grown, in the end you will still lose money. The scammers show a good deal to encourage the investor to continue to Fund your Deposit. In reality, however, the company or "draws" all of the operations or works against the customer. Market participants are advised to pay attention to the following signs of "suspicious" behavior of the Forex dealer:

— providing leverage for all investors regardless of experience and qualifications;

I always is the practice, when a client attempts to commit the transaction, and the broker he does not allow it, returning a degraded price;

— non-transparent terms and conditions that do not correspond to market realities. For example, undervalued exchange rates or "discounts";

— game spreads. The company may permanently narrow and expand them at its discretion, in advance without notice to the customer;

— the opaque policy on the execution. For example, the company takes the deal at the best price, without notifying the client.

an Important sign of fraud — the manipulation of prices against the client. In this case "stuffing" quotes (the setting does not correspond to the market quotes), with the result that the client receives a loss.

According to Eugene Moskalenko, scammers often use indicative quotes, not responsible for their accuracy. Moreover, the investor should think about how truthfully provided information about the courses, if the dealer receives quotes from another dealer of the offshore zones or the range of suppliers is indicated indefinitely. "To make sure that the company is not "making up" quotes, it is enough to simultaneously open the site with quotes, for example, Bloomberg or Thomson Reuters and compare quotes for your company with these valued suppliers. They should not be identical, but should roughly be correlated", says Vladislav Kopecky.

According to Alexey Dolzhenkov, if the broker prohibits the use of certain trading strategies such as scalping, is also an alarming sign. "The fact that many customers use different trading systems. And if they are profitable for the client, sometimes a broker starts to worsen the conditions or to prohibit such a strategy," — says the expert.

albert KOSHKAROV, Banki.ru