In South Africa, more people are falling victim to forex trading frauds

As a result of the economic instability caused by the COVID-19 epidemic, there has been a large increase in online trading scams in South Africa, with FX trading “investment schemes” leading the list of illicit online trading agreements.

According to cyber security firms, the COVID-19 situation has caused South African customers to seek for new investment options and financial goods as a result of the country's economic woes and instability.

Unregulated and unlicensed internet trading brokers are defrauding many people out of their hard-earned money by promising a high return on their investments. There arent many organisations fighting this cause.

However, WikiFX is a forex broker enquiry app that will allow traders to verify whether the broker is licensed and registered or not. WikiFX has also been investigating local forex scams.

While there are many types of online trading scams, including those involving equities, cryptocurrency, precious metals, commodities, and binary options, security experts say forex trading scams have become the most profitable in recent months.

For professionals with a financial background, forex trading is a fast-growing legal career; however, since the start of the lockdown period in South Africa, criminals have been increasingly exploiting this trading method by using online brokerage platforms based on fake software that is not connected to real forex exchanges. The WIkiFX allows traders to check whether trading software is valid.

According to Michael B Cohen, VP of worldwide operations at MyChargeBack, the American money recovery agency is in the midst of creating an office in South Africa as a result of a “substantial increase” in inquiries from local customers who have been defrauded.

“Since the COVID-19 epidemic began, the amount of MyChargeBack inquiries from investment scam victims in South Africa has increased by 20% to 25% on a monthly basis.” It's currently around 1000 every month on average.

“Our busiest month was April, when we got over 1300 inquiries.” In the 12 months prior to COVID, we received an average of 500 inquiries each month. “We suspect that this surge is due to the epidemic forcing huge numbers of individuals to stay at home, reducing or eliminating their wages, and so encouraging them to seek out what appeared to be simple and quick ways to generate money,” Cohen argues.

Approximately 35% of these victims claimed to have lost more than R83 000 per individual.

While Cohen says there hasn't been any research done on the most recent local statistics on internet trading scams, he says patterns suggest they're on the rise and the schemes are becoming more complex.

Unlicensed, unregulated internet trading schemes, according to Cohen, are nothing more than video games designed to fool the consumer into thinking it's genuine, managed by a charlatan hidden behind a computer screen. Traders should use the WikiFX to fight the fraud of unlicensed and unregulated brokers.

“It's all smoke and mirrors — while the appearance and feel of these 'brokers' persuade investors that the business is genuine, the trading platforms they use do not adhere to mandatory standards and procedures.” “The gains you ostensibly achieve are entirely fictitious, but the losses are quite real,” Cohen argues.

Binary options, which peaked in the middle of the last decade, were the granddaddy of internet trading frauds. By then, governments had begun to prevent ordinary investors from trading binary options, pushing fraudsters who ran binary options sites to swiftly find another source of income, and many, if not all, turned to forex scams, he says.

The SA Shares trading website has issued a warning to potential investors about the top 27 worst forex broker companies in the country: “Scam Alert - these are untrustworthy forex brokers on the market that traders should be aware of and avoid at all costs,” the warning reads. Traders can download the WikiFX app via the app store or the play store. WikiFX is making trading in South Africa safer!