Top Financial Institution Common Scams and How to Avoid them

financial institution common scams

The people associated with forex, online, money, or any other trading scams always try to find an innovative and new way to trick traders. They target those traders who lack basic knowledge about the market or scams. Here we have put forward some common scams for which investors usually fall. It would include some significant scam types and the things to do to avoid them. 

Popular Financial Institution Common Scams

Some of financial institution common scams include:

Phishing: The scams where the customer receives an e-mail asking you to verify one’s card details or bank account number. 

Automatic Withdrawals: Many times, companies automatically debit the amount from customer’s cards without letting you know. Some of the top useless reasons for the debit are making you qualify for contests, free trial, or collect a prize. 

Unsolicited Check Scams: The scammer either sends the payment notification or checks to the customer for no reason or request. If the unaware client makes the payment, he is indirectly verifying the buying of some product, item, or service, or authorising the loan one didn’t ask for. 

Broker Scams: Trading frauds are prevalent these days and are becoming a common problem among people. Broker attract the customer through unfair means like too low prices or some special offering. These brokerage firms charge customers with hidden costs & penalties, making all the investors lose in the long term even after making smart financial decisions.   

Robot Forex scam

A forex trading bot is a kind of computer program which makes use of computer codes and algorithms as technical signs to close any open trades. However, not all robot programs are scams. These scams are spreading their roots at a fast phase in the international market; hence the need is to find ways to avoid them. Here are some of its examples:

E-mail forex scam

Some forex frauds send you mail asking you to click on the hyperlink or open the provided document through your details. As soon as you see such e-mail, delete them. They are fake e-mails, and clicking on links may redirect you to the page which the scammer wants. 

URL online forex scam

Many forex frauds copy the entire design of the original website to befool traders. Traders ignore URLs in a hurry and enter their details such as mail id, name, mobile number, security number, or other bank details on these sites. When they recognise that this was just a trap, they are left with nothing to regret. 

Always remember that the design of many websites might be similar, but their URL is always different. All URLs are unique. 

One Time Password forex scam (OTP)

One Time Password is a code generated by the concerned institution for verifying that you are proceeding with that particular task or transaction. It is sent on your registered e-mail id or mobile number. Without this code, no transaction or task can proceed. It is the most common type of forex fraud. They crack your details, but in the end, they require your OTP code. For this, they make a phone call asking you to share the OTP. They ask you to share it as fast as you can, claiming that you are mitigating your chances to win the lottery with each passing minute. Never reveal your details to an unknown person. 

How to Protect Yourself?

Here are some essential dos and don’ts to avoid falling into these financial institution scams. 

Things to Do

  • Carefully analyse the free trials or lotteries that ask for unnecessary details like bank account numbers and card codes. 
  • Check the contact information on trusted bank’s websites while verifying the issuers.
  • Double-check the regulations and authenticity of the other party with the bank or financial institution before depositing. 
  • Check the trading site’s regulations and licenses on their website and if not available, ask the customer service executives. 

Things to Avoid

  • Do not offer your card number to unauthorised individuals or entities. 
  • Don’t tap or click on the links in an e-mail or message that asks to verify your bank account. 
  • Ignore calls that ask for personal and financial information, like bank statements or debit card number. 
  • Avoid trading with a low-cost investment site that is regulated by the top tier financial body, like PrimeFin. 

PrimeFin Broker

PrimeFin is a Labuan based trading site that is incorporated under the investment firm, Caps Solutions Ltd. The firm is regulated by LFSA (Labuan Financial Services Authority) with license number MB/20/0052 and obeys the rules of other governing bodies like EU, MiFID, and ICF (Investors Compensation Funds). 

Further, the brokerage firm provides 250+ financial assets for trading which includes shares, crypto, commodities, indices, and currency pairs. All the pairs are accessible through the widely used Meta Trader4 trading platform, available on mobile, web, and desktop versions.

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