Use these tips to avoid online trading scams: Internet Scambusters #1,114
Many small investors are now able to buy stocks, cybercurrencies, and more via online trading sites.
So, scammers have muscled in by setting up fake sites, some of which look like the real thing. But the only real thing is the money they want to take from you.
In this week’s issue, we’re giving you a dozen actions you can take to avoid being scammed.
Let's get started…
Don’t Get Scammed By Fake Online Trading Sites
Online trading – buying and selling stocks, shares, currency, cybercurrency, and commodities – has made it easier than ever for ordinary folk to invest and speculate. Millions of us do it. But beware – scammers have set up fake trading sites to grab your money, and you’ll never see it again.
As the US Commodities Futures Trading Commission (CFTC) warned in a recent alert: “It doesn’t matter how much scam trading websites claim you will earn, or how easy or risk-free they say it will be, you will lose any money you give them.”
These fraudulent websites often mimic genuine trading sites, making it difficult to spot them at first glance. So, how can you tell if a site you’re thinking of using is genuine?
12 Ways to Help you Spot Fake Online Trading Sites
- Research. Yes, we always stress the need to thoroughly check out any site or organization before giving details about yourself or parting with money. Check for reviews and verify them with official sites like the CFTC and the Securities and Exchange Commission (SEC). Some more details are given below.
- Website authentication. Are you where you think you should be? Look at the address bar – is it absolutely correct? Is it secure (with a padlock and “https” at the front)? And who owns the website and how long has it been up? Find out at ICANN Lookup.
- Regulation. Ensure the supposed trading platform is registered with the above or other regulatory authorities. Ignore logos and other official-looking “seals;” they may not be genuine.
- Clarity. Does the site provide its address and location, which you can check with Google Maps? Is there verifiable contact information? Does the site include detailed terms of service and privacy policies? If it’s not clear, vague, or confusing, move on. Beware of any sites that don’t have a US headquarters.
- Promises. Anything that promises big and/or guaranteed returns is probably a fake. Instead, there should be a risk warning. Beware too of statements urging immediate action.
- Customer service. Check them out. Contact any posted customer service address or phone number with a couple of questions and gauge how they respond. They should be prompt and professional.
- Site appearance: While some fake sites mimic genuine ones, others are created by scammers. These may be poorly designed and have spelling or grammar mistakes. Or they may have links that don’t work.
- Social media. Many online trading sites, especially fraudulent ones, first show their faces on social media in ads or questionable messages. But reputable ones may also show up from time to time. The difference is the good guys will have a reliable social media presence where they post regularly. The baddies will not.
- Endorsements. Some scammers have hijacked the names of well-known businesspeople and celebrities. Ignore these but do look for endorsements and testimonials from verifiable sources.
- Spam etc. Don’t respond to unsolicited calls and messages or spam that finds its way into your inbox. Equally, be wary of “recommendations” that seem to come from family or friends. Their accounts may have been hacked.
- Transfers. If the site won’t connect to your bank or other financial institution, it’s probably a fake – scammers know a genuine bank will spot them as frauds. Instead, the scammers will try to talk you into changing your dollars into Bitcoin on a legitimate site and paying with this untraceable currency.
- Awards. Another trick scammers use is to claim they’ve won awards in the financial sector. But if you check these out, you’ll find either that they don’t exist or that they’re simply not credible.
Finally, trust your instincts. If you feel uncertain about a site or just have a negative gut reaction, go with that feeling and look elsewhere.
Crypto currency trading is the big thing right now, so that’s where you’ll find most of the scammers. As the CFTC notes, “Cryptocurrency trading platforms are considered money service businesses (MSBs) by the US Treasury and must register with the Financial Crime Enforcement Network (FinCEN).”
Some states actually have additional requirements for currency traders to register. Be sure to check their registration.
If you do, sadly, get scammed with a fake online trading site, make sure you report it. That way, if there’s any chance at all, you may get some or all of your money back. And you’ll be helping others avoid the same mistake.
This Week’s Alerts
Speaking to celebrities: Who wouldn’t want to talk to their favorite celebrity? But chances are high they don’t want to talk to you on the phone. Yet hundreds of social media users are falling for a scam, driven by artificial intelligence (AI), that mimics the voices of celebrities and, of course, ends up asking them for money or confidential information. Fake social media pages in the names of some celebrities carry messages inviting followers to call for a chat – often with the promise of a romantic relationship. Think about it and you’ll realize it’s a scam.
No wedding: And who wouldn’t like an invitation to a wedding, especially if it’s someone important. It may sound implausible but, according to security firm F-Secure, people, especially older folk, are being taken in by invitation messages on WhatsApp on their Android cell phones. The messages have a supposed invitation card attached. But if you click on it, you’ll get a delivery of malware onto your phone.
Time to conclude for today -- have a great week!