Financial scams are a widespread phenomenon that, unfortunately, puts the savings of many investors at risk. Although scams affect people of all ages, backgrounds, and economic levels, it’s possible to fight back.

The key lies in knowing both how scams occur and how investing and trading work.

In this video, we explain exactly how the most common scams work and offer helpful tips and valuable information to help you recognize and avoid scams.

By watching the video, you’ll discover:
-How the most common scams work (mechanisms and recurring patterns)
-How scammers convince you to trust them with your money
-What alarm bells indicate a scam
-How to recognize a deceptive promise of income

Enjoy! 😎

Transcription

Introduction

Trading scams. Unfortunately in my position I receive many emails with claims of being scammed by really well-organized systems and the scheme is mostly similar.

Classic & Timeless Scams

And most of the time, what these people do is, they try to leverage our ignorance, our ignorance in the financial markets, in the financial world. We read news about fantastic returns on... Today is cryptocurrencies but in the past there was Forex, options, binary options, whatever.

And we think that there is a world out there where there are people who know how to create money from nothing, something like that. Okay? So actually there are two different families of scams. People who simply... Who act with goodwill, I mean, people who really believe in what they do. And they ask for your money to trade in the markets and hopefully to make gains because they believe they have a good system to make money.

Unfortunately, there is no magic system out there, and sooner or later these people lose money, and they lose much more than expected simply because they don't have a decent risk control. So even though in good faith, these people are scamming you and lose your money and you can't do anything. This is not legal. I mean, not the scam itself, of course, the scam is always illegal. But the fact that unauthorized people manage other people's money. This is not possible unless you are an organized structure to do so, allowed to do so.

And when they lose the money, it's hard to recover it because, as I said, it's done on pure losses of the market. Another older scam, I spoke about this, is people who manage foreign money and they do this in this case knowing to betray people, and they just say, "okay, we spit profits". So they ask for money from Mr. A and money from Mr. B. Then they take exactly opposite positions. When there is the big hit, Mr. A might double his or her capital. And Mr. B is losing everything. So in the end, they go to Mr. B, "Oh, sorry about that. The black swan..." I've already spoken about this in another video. "I'm really sorry. I can't believe it. Blah, blah, blah, blah." And with Mr. A, "Great, look, we did it, now give me my 50%, everything is fine and that's it". So this is obviously a scam.

Recurring schemes in today's scams

But today scams are even different because people call you on the phone and they invite you to invest. They claim to be a broker and they promise you to be followed by an account manager who will be telling you what to do. You don't know what to do? No problem, we have an expert, he's telling you what to do. They ask you to wire an initial small sum, $200-300 and then they start showing you operations in your account which might be fake.

I mean, don't even believe what you see because nobody can tell you that that is real, that those trades are real and that the returns are real. It might be, it might not. Because there is no need to show you real thing because they want your money. They don't want you to become rich. So that's because they know you don't know anything about the markets. Okay? So I'm just showing you something on mysterious markets.

Based on the initial nice returns, they ask you for more money. You see the potential of this and you send more money. Obviously, the higher the response from you, from us, the poor guys in this case, the higher the power they put in pushing you or pulling you to send money and more and more money. So $200, and $2000, and $20,000 just to go big, okay? And sometimes all of a sudden they disappear. Normally when you ask for your money back, I mean, we say, "okay, I have a lot of money now, please send me, maybe not all on the account but send me part of it".

They disappear. Eh, you can't trace them anymore, unfortunately. Not always. Sometimes they disappear for a while, then they come back and they show you an incredible amount of money in your account. Look at this. Now, you want the money, and they say "no problem". Sometimes they ask for you to pay extra sums to prevent I don't know what kind of technical block in the system, something, and you believe in that because you want the money.

Or in more sophisticated cases, they ask you for money to pay the taxes of the profits you made. They say "look, the money is here, I'm ready to wire it back to you. But of course, you have to pay the taxes because you made a lot of money so you have to pay taxes. Send the money for the taxes and I will take care of that, no problem".

If you say "okay, but take the money from the profits". "No, that's blocked, blah, blah, blah, you have to send me the money."

Okay, you see the money, you send the amount that is due to pay the taxes and at that stage, they really normally disappear completely, and you can't get on the phone with the account manager or anybody else in the company any longer.

The "lawyer" scam

Unfortunately, in some cases there is a second step where, after a while, somebody is calling you and I'm still wondering how all these people have our phone numbers, and they claim to be a lawyer or somebody in a lawyer's team who got the mandate to recover money from this fraud. You are aware of the fraud of course, because you were one of the people who lost money in this, and you are willing to listen to this lawyer.

And so they say, "look, we know there is this and this and this. And now we are working on it. We call from London". London is the financial city, okay? And what they are doing, they're asking for extra money. So you have to send money to go ahead, and you send money because you dream to be out of a nightmare. You dream to get the money back, not even all the money you have, but at least the money you were stolen from. I mean, you try something and then they disappear again.

What do scammers exploit?

So the main problem of these scams is, as said, they're based on our ignorance. Mostly on ignorance on potential returns that can be made in the markets. And if we are not aware that averaging a 30%, 3-0%, a year for many years is great, exceptional, is outstanding. If we are not aware of this, obviously when somebody is claiming they can double our account in a couple of days, we tend to believe it. Because we think they know how to do it.

But that's not possible. I mean it's possible, it can happen, everything can happen, but it's really hard, I would say impossible, it happens every day or constantly. It's not replicable.

So even in case there are things that can happen where you see outstanding and incredible returns in a very short term, that's not something that is replicable. So it's not a standard return from the markets.

So when we see and we listen to Bitcoin stories, all things like that, everything is true there. Bitcoin really went from nowhere to the stars, pulled back but even now it's much higher than it was at the beginning. But I mean, that's a different story. That story is not replicated again. Now is not going ahead and going 10,000 folds from where it is. It's not. I mean, everything could happen but that's not what to expect, it's not what can happen. And if we are not aware that what they are promising is simply impossible, obviously we tend to believe and to send money.

How to defend ourselves

So first thing, you have to be aware that trading, investing in the markets, can lead to decent returns but nothing close to what they are promising. Remember: 10%, 20%, 30% a year is something which is great if constant. 30% a month is in no world, it doesn't exist. It can exist one month. I did it myself, of course, but I'll never be telling you I do it every month because that is bullshit. Sorry for the word.

So believe me, ignorance on returns is something that can pull us into these kind of traps, and we have to be aware that these people are pointing on ignorance and greed. Greed which is not bad in this case. We all dream of becoming independent, rich or at least wealthy, okay? So it's fine. We don't like maybe our lives, so we want something different. We have to work on that. But certainly we can't get there through the promises of these scammers.

Please really stay tuned and be careful when somebody is calling you promising you returns with names maybe you are familiar with. Amazon, things like that. Okay? If you really want to listen to them, first take all the notes and then check yourself. Google through the information they send and you will most probably find out they are a scam. If you don't find out it's just because they are new and there are not enough news about them yet on the markets.

So don't fall into the urgency trap, "now or never". No, wait, do it with your time and take your time to verify. Don't believe in the fancy papers they are sending you with all kinds of stamps, FCA or whatever. No, they are mostly fake and the higher the number of stamps, the higher the probability they are sending you something just to impress you.

Make your own research but don't believe in that kind of claims where you can really become rich from today to tomorrow because those kinds of claims obviously are only looking for your money in their pokets. Be careful!

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