Forex trading Instagram scams can be all the rage for the most obvious reasons. The followers, in their thousands, are from a relatively poorer background. They see nothing wrong in aiming to be rich. After all, has it not been hammered home so often that to be rich is to be right? Nothing succeeds like success. And what smells more akin to success than fresh wads of cash? The reasons folk like money are not too complex and relatable. The targeted group of Instagram users are all in their early twenties. Seldom is it that followers in their late twenties are found. Such folk are easily persuaded. When they espy influencers with in trend swagger, they judge they cannot be one of the ‘Uncool’, so they willy-nilly follow the ever-increasing herd.
Forex trading Instagram scams: binary options
The financial sector can come up with new products that fall a hair’s breadth short of law-breaking. The sector took advantage of the grey area between what’s not allowed and what can be got away with. In the wake of the 2008 Depression, a new instrument was designed to exploit the uninitiated – the binary option.
Conceptually, nothing could be simpler. You sign up with a GBP 250 minimum deposit from a debit/credit card, click a button that attests that you are not underage. You then bet on whether the price of stock, currency or other financial security will appreciate/depreciate and by how much. The binary option is closely related to spread betting and contracts for difference. These products became popular besides a proliferation of mobile trading platforms and online trading software.
Forex trading scams UK Instagram: the plague from overseas
The craze for mobile trading platforms and online trading software was an import from Israel and Cyprus in the late 2000s. As things were working out, these mischievous firms were accessing European Markets without regulators restricting them. So, like chain letters, new binary options companies just spread. Post-2008, in Israel alone, a hundred plus companies sprang up within a few years.
Are instagram forex traders legit: exploiting novices
Between 2016 and 2018, binary options products have taken great strides into public life with costly marketing campaigns. For example, plus500, the flamboyant online trader, is the chief sponsor of Atletico Madrid, and 24option has sponsored Juventus. These companies are fully legit. However, not a few others are fraudulent within a hair’s breadth of breaking the law.
The Financial Conduct Authority or FCA showed in 2016 that 82% of the trades involving these financial products were lost. The average trader chalks up a loss of GBP 2,200 per year. Dissimilar to the mortgaged-backed securities that led to the 2008 market tanking, these products are not offered/owned by the world’s largest banks. Instead, the targets are noises looking for a quick buck.
Are Instagram forex traders real: high-risk gambling
Thought of as extremely volatile, binary options have been outright banned in the US. Until January 2018, binary options were classified as high-risk gambling products. As such, they were regulated by the Gambling Commission. After that date, they have been under the aegis of the Financial Conduct Authority or FCA. The latter has published a list of unauthorised firms and guidelines.
Forex trading Instagram scams: influencer-operators
It befuddles the mind not a little that such complicated products become an internet youth craze. This is where the Instagram influencer-operators swagger in. These flamboyant scammers like to describe themselves as social media influencers. The implication is that he and his ilk can employ Twitter and Instagram to sell the trading platforms (their employer) a supply of teenagers and young adults. The latter have little knowledge of money markets and are ever hungry for success (read ‘money’).
Forex trading Instagram scams: what makes them tick?
Here’s how they tick.
The scammer influencer-operator posts images of luxury goods he claims to have purchased with his earnings. He renders the pictures hashtags like #richkidsofinstagram. He also mass follows young people online. Some followers are attracted to the oft-flaunted Rolls Royce. Upon anyone following the operator back, he slides into their DM with a message. He makes them an offer they cannot refuse. He says words to the following effect. He is offering an unrivalled opportunity to earn more than a GBP 100-400 each week, no experience required, all done from home and only needing up to 30 minutes each day. What down-on-their-luck young man/woman would say no? They avidly sign up.
Forex trading Instagram scams: affiliate marketing plus pyramid schemes
Whether they admit it or not, the way these scammers make risk free money is a bit convoluted. Each of the trading platforms the recruited sign up to pays him up to GBP 80. The scammer influencer-operator is an affiliate marketer, and he is selling cheap labour in the form of these recruits. Young folk keep joining the platforms, make a number of trades, and lose anything between GBP 250 and a few thousand pounds. The recruits then understand that they can recoup losses by becoming a paid marketing affiliate in the guise of a successful trader. This is nothing but a vintage pyramid scheme, rebooted social media era.
Forex trading Instagram scams : rigged against you
A SpotOption operative divulged to a scribe that the system is rigged against the consumer. The average consumer would lose up to 80% of everything he put into ‘trade’. When the Bureau of Investigative Journalism published the story, SpotOption was banned in its home country Israel.
SpotOption sings a different tune now. It says that, post the legislative changes in Israel, it has ceased all binary opinions related activities and erased agreements with clients found to be acting immorally.
Forex trading Instagram scams : a plague of stealth marketing
In 2017, the FCA initiated an investment scams crackdown. Police raided 20 premises suspected of running binary options fraud. However, the influencers who are, in fact, operators for overseas firms have scooted the authority’s attention. Social media is now truly a Wild West for marketers. They can keep casting dust into the regulators’ eyes, knowing that there are no clearly laid down processes to keep a tab on their nefarious activities. Complaints regarding the menacing nature of instagram influencers’ stealth marketing have been climbing.
While it is close to impossible to count the number of marketing affiliates posing as successful traders on Instagram, we can still count the number of promotional posts they have made using hashtags like #binaryoptions(222,206), #traderlifestyle (64,151), and #richkidsofinstagram(529,574). Even as the numbers rise by the minute, the thousands of accounts yielding them appear and disappear continually.
Forex trading scams UK Instagram : no-win gambling
The companies making the real money out of these financial gambling products should be monitored by the ASA, the Gambling Commission, and the FCA. Per the National Fraud Authority, binary options have defrauded GBP 59 million from UK residents in 2017.
The binary options are close to no-win gambling products posing as sophisticated financial instruments. The companies and their agents peddling such poison bob up from the depths of the internet-morass, now and then. They are visible only to those who are looking for them.
Conclusion
The concerned regulators are unwilling, it seems, to stem the rot. Forex trading Instagram scams can be stymied, beaten down with rules. However, the relevant legislation is too restricted to take phenomena such as these scams within its ambit. However, following pro-active moves against their business recently by regulators who were determined to crush binary options as a gambling product, the scammers have found something similar they can sink their teeth into. Cryptocurrency trading. While regulation will be slow-moving, in the meantime, it is the Youth’s duty to not to stray away from the straight path.