British Prime Minister Boris Johnson gestures as he speaks during a coronavirus news conference inside number 10 Downing Street on March 19, 2020 in London, England.
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Investments in the wake of global pandemic.
During this time of uncertainty facing a worldwide epidemic, many people turn to the online environment. Whether it is for information and shopping or companies and business that are interested in getting your business from home.
With the uncertainty of the policies issued by worldwide governments, the uncertainty of the economic status is maybe the most troubling for most everyday people.
During this time many people will encounter commercials and advertisements for investment instruments and investment firms. When people are concerned with their financial future, many will make very bad decisions as demonstrated in the financial crash of 2008.
While the Author of this Article is in full agreement that this might be a very good time to make smart investments with an emphasis on smart (keeping in mind the risks and hazards that are involved)
Many People are not aware of the fact that at least 80% of the commercials you will encounter belong to scam investment firms.
Scam investment firms come in many shapes and forms. The industries that are most inclined to have many Scam Operators are: Forex Trading, CFD’S, Binary Options, Crypto Trading & ICO’s but not limited to only those fields.
The majority of these scam companies operate as follows:
They will offer you an “Automated Trading System” That will make you thousands of dollars for a very small investment, they will offer High returns in the range of 20% and up to 100+ %
In my opinion just as our parents have always said; if it sounds too good to be true, it usually is.
So how can you identify a scam company and what should you do if you find this article too late?
Well first thing is a License. In order to provide financial advice or financial instruments a company must have a license from the relevant authority in that country. The license represents more than just supervision and rules of ethics – it provides investors who feel they have been mislead with an outlet to be able to file a complaint and get their money back.
With that being said not all regulations are equally protective of the clients; for example Investment firms with a license from Vanuatu or Cysec are not as safe as companies with a license from the FCA or ASIC. Since this is the case, I recommend investing only with a firm that is regulated in your place of residence. Just to clarify a 100% of investment firms that operate without a license are scam companies, and all of the money that you send them goes directly into their pockets and you will not see that money again.
What can be done if you’ve already invested money with a scam company?
To put it bluntly – The first step is to face reality. Unfortunately, many people are not aware of the scope of these kinds of scams. The current estimates are that over 3 and half billion US dollars from millions of clients around the world are being transferred to scam operators each year.
If you didn’t have previous knowledge of the financial markets operation and regulation it is likely you fell victim to this kind of scam.
If the funds were transferred via a credit card in the past month or 2, the most important thing that should be done is to contact your credit provider and ask for a “Chargeback” That is the reversal of the payment.
In most countries the credit card scheme offers such reimbursement under certain criteria that of course varies from country to country.
If the transfer of funds was in a different method or a different time scale, you will need to hire professional assistance. It is important to say that if the amount you lost to the scam is in the hundreds and not in the thousands, it would be better to see it as a lesson well learned for the future, and write that money off. However, if the money transferred is a considerable amount and you can’t write that money off, then it’s time to take action.
The options are a recovery firm or an attorney.
So, what should be done? Well the answer is surprising since scam companies that are making millions of dollars each month may be low on morals, they are definitely not low on legal assistance, and as such, they are constructed in a way that prevents you from taking legal action against them.
For example, the company that you were trading with was let’s call it X Trading.
X Trading is owned and operated by X Solution incorporated in Bulgaria or Hong Kong
X Solution is a shell company it has no money and it is owned by what we call a monkey. A monkey is a person who lives in some village somewhere who probably doesn’t know how to read and write, but he gets his $500 a month to sign some paper work and owns a million-dollar company.
The actual operation and management will be conducted in a different country and the company there will be registered as a call center or a marketing company. That company provides services to the shell company “X Solution” and the 2 have a contract stating that the call center or marketing company only provides services to the shell company and is not liable for anything the shell company does.
That excuses them from any repercussions and only after incurring thousands, if not tens of thousands of dollars in legal fees, will you reach this conclusion.
That leaves us with recovery companies, but can we know who is legitimate and who is not?
There are many scam recovery agencies referred to as “Double dip scams”
The first step that should be taken is to check how long their website has been in existence. If the website has only existed for a few months, chances are it is a scam. There are many tools online to verify the age of a website.
The next step is due diligence which means checking their track record to see if they have testimonials, recommendations, and an online presence? These are important questions that need to be answered.
Once the previous checks have been made, the real verification begins – It is crucial to check where the company is established as well as their licensing and registration information. Verify them with the relevant company registry in its country, the website will have a gov ending.
And most importantly – how do they charge for their services? If a company asks for payment in Crypto currencies, it is a 100% Scam. The payment must be done using a credit card that provides you with tracking or a wire transfer to the country the company is established. A token of advice – countries that are not members of OECD payments should only be made with a credit card.
Lastly, make sure to choose the company and contact them and not the other way around. If someone contacts you with the knowledge that you’ve lost money, it is considered cold calling, and cold calling is usually indicative of a scam.
In summary, the best strategy is to be cautious online and verify who it is you are doing business with.