Thursday, September 1, 2011

What is Foreign Exchange Scam?

Today, Foreign exchange (Forex) is widely used as an investment vehicle and a means to exchange foreign money for individual and commercial purpose. Travelers have realized the fact that foreign exchange firms offer the best exchange rate and fast services in the market. Foreign exchange market is an online market, completely situated on the world wide web platform. It offers plenty of benefits and seems lucrative but at the same time there are potential chances of internet fraud and scams. There are thousand of website and forex broker provide service to help client exchange foreign money. And almost 60% of them are fake.

Foreign exchange company which is a scam try to allure the retail investors by promising high gains on a regular basis. To make you victim of this fraud, company ask you for very small amount of deposit or initial trading amount. The company offering leverage of 10 to 1 is recommended, the lower the leverage lesser the risk. CFTC (Commodity Futures Trading Commission) is a legal body to keep an eye on the US forex market. This body has also rights to rule any act in the financial world of United States. Central banks and commercial banks take the responsibility to make their customers aware about the frauds in forex trading. However, retail traders are more attracted to the non-official or private forex brokerage firms. You must be wondering how will you ensure that the firm is scam or a loyal firm? The best way to check is FSA authorization for UK citizens. If you are in UK and forex is firm is FSA regulated which means that firm is legally authorized and regulated by the government body. Other European countries have also such kind of legal bodies to regulate forex trading and protect the density of internet scams.

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