Investing Online: How to Avoid Scams

Investing Online: How to Avoid Scams

False investments in airport car parks, in cryptocurrencies, champagne, or gold… Some savers believe they are investing their money, enticed by miraculous promises of return.

Many of our Law Firm’s clients contacted us when they had lost funds in a financial scam. They explain that they had invested their savings in a Forex company, which has a head office in an offshore country (Saint Vincent and the Grenadines, Bermuda, Vanuatu…). Most of the time, it is a scam. Such cases are unfortunately common, and public authorities are aware that there is an increase of Forex scam investments in 2020.

Shame and fear of not being able to recover lost funds may motivate victims not to report the scams. In general, people should avoid investments presenting a risk of capital loss and prefer low-paying but safe investments. But the returns of safe investments or euro life insurance funds may nevertheless seem unattractive to many savers.

Only One Real Purpose: to Defraud You

You can find on the Internet proposals from companies promising you returns of 5, 10, 20, or 25%. With these beautiful promises, however, inevitably comes the risk of loss. Not all sites that offer you winnings and display a risk of loss are fraudulent some of them have a license and you can sue them legally.

No matter how you receive the investment offer be aware of the risk of loss Investing requires you to be experienced and sharp, so always estimate your knowledge in financial matters and consider the need for management work.

Beware of the companies at the origin of scams: they offer no financial service nor real object; their only purpose is to defraud you, and they are therefore likely to make you lose your money automatically.

Google and Facebook: the Gateways for Scammers

Scammers have two major types of victims: the elderly and the upper-middle-class. They use two main gateways to lure victims into their financial scams.

When Google removes scammers’ sponsored links due to reports, social networks become the second leading gateway to attract scam victims.

If the platforms do not buy advertisements on a social network, they infiltrate certain groups to spread false information.

For example, a scammer using a fake profile will claim on a Facebook group with hobbies associated with money, such as golf or horseback riding or trading itself, he won money. People then contact the scammer, invest money, and lose their funds before comprehending the situation.

Based on our experience, an illegal online platform may carry out a scam by offering you to invest part of your savings. It pays you interest or dividends after a few days to encourage you to invest even more money. Then the platform disappears or it doesn’t let you recover your funds.

Beware of Returns Too Good to be True

Beware of advertised rates of return that are much higher than the market average. If the rate of return is 25% while the standard for the product offered is 2%,look twice before investing.
What’s more, many victims let beautiful well-done websites seduce them.

If someone, who is very insistent, urges you to invest your money, it must make you ignore their pleas. You can ask your bank for advice on whether to invest in a particular company.

Consult Financial Market Authorities Blacklists

Consulting the documents or websites of the Authorities is an essential precaution. You can examine the blacklists established by the AMF on these topics:

  • Binary options;
  • Cryptocurrencies;
  • Forex;
  • Miscellaneous goods.

But blacklists of market regulators cannot be exhaustive. The blacklists include only companies that provide services without any authorization to exercise their activities. What’s more, beware of the latency effect between the occurrence of scams and the exactness of a blacklist.

The Most Common Scams

Financial scams work in waves. Based on our experience, scammers only exist for few months or a year before they disappear. Most of the cases that reported to the different European Authorities concern :

  • Airport car parks or in establishment of rooms for dependent elderly people (nursing homes);
  • Usurping the name of financial products, such as real estate investment companies (REITs), offered by false intermediaries;
  • Various goods such as wine, champagne, whiskey, or diamonds;
  • Via fake crypto-currency platforms, for example, offering bitcoin;
  • On Forex, an unregulated foreign exchange market.

Are you thinking of investing in cryptocurrencies like bitcoin?

Financial investment firms need to have a registration to provide cryptocurrency services. Such registrations offer the right to provide the following services:
• custody of crypto-currencies or access key to crypto-assets;
• purchase and sale of crypto-assets against legal tender currencies.

A company that offers one of these services without being registered may appear on Market Authrotities’ blacklists.

Market Authrotities’ registrations mean that the competent financial regulators verify the integrity and competencies of the platform.

It would be best to verify that the persons who wants to sell their services to you are registered on a whitelist. Nevertheless, even the verification doesn’t exempt savers from risks as with any investment.

Training Schools Supposed to Teaching You Trading

Beware of video tutorials that claim to teaching you how to trade. The profession of a market operator requires having completed in-depth knowledge on complex financial tools (forex cfd).

Most of the time, training packs promise to young people they will get rich and pressure them to recruit other young people. When you invest in Forex trading, you risk investing in highly risky products, such as CFDs, and other complex speculative financial instruments.
Based on our experiences, platforms that sell training packs use an esoteric language and even make victims cut ties with their relatives.

Financial Fraud Lawyers against Crypto Scams

Forex: Beware of proposals outside the European Economic Area (EEA)

Whenever you receive investment proposals from companies based outside the European Economic Area (EEA), you are inclined to take high risks. In such cases you will not have any safeguards as companies outside the EEA do not respect European laws.

According to European market regulators, even if the actor is authorized to practice, you must be aware that on average 90% of clients lose money on Forex.

Find Legal Advice to Protect Your Investment

Law Firm Mikov & Attorneys believes that justice can stop the operation of financial fraud.

As a matter of principle, you must always complain and take legal action before the Аuthorities to respect their duty to protect the Law.

On some occasions, it is hard to make the Authorities opening of an investigation. Thus having legal representation is an effective way to have the best outcome of any financial dispute.

When submitting your complaint to our Law Firm, have in hand your bank statements and any official document or contract provided by the investment firms or scammers to show the date when the investment/ deposit was made.

Based on your situation’s preliminary analysis, our Law Firm Mikov & Attorneys will consider if you have good chances to get your funds back.

Resolving such fraud cases is a matter of tie handling as we need to intercept the funds before the companies disappear. Thus the dispute should not have originated more than five years ago.

If the dispute has occurred more than five years ago, based on our experience we consider that such complaints are seldom successful.

The chances of getting a criminal conviction and getting your money back are higher if the companies you are complaining about are located in France or another country within the European Union rather than outside Europe.

Most of the clients we represent have cases against Cyprus investment firms, said Konstantin Mikov, Managing Partner of Financial Fraud Lawyer.
Suppose banks or other regulated financial institutes are intermediaries. In that case, we can file a complaint against them and try to recover your funds. In fact, Banks have a duty of vigilance in such a situation to inform customers and prevent Banksrisk of money laundering.

Financial Fraud Lawyer Defends Victims of Scams

With Financial Fraud Lawyer you have the option of contacting lawyers specialized in financial dispute resolution if you are :

  • Non-European residents against Brokers regulated in the European Union;
  • European residents against Brokers regulated in the European Union;
  • European residents against worldwide regulated Brokers.

Cases against unregulated brokers need to be discussed after a preliminary analysis of your case. The dispute should not have originated more than 5 years ago, and the amount disputed should not be less than 20 000 USD/EUR.

If you feel that your broker is liable for your losses, please contact us and we will provide you with a free preliminary analysis of the case.


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