Types of Trading Scams you Should Avoid

Trading Scams

Learning and getting knowledge about various trading scams and frauds is one of the best ways to prepare yourself to combat and fight it. In this article, we will list down some common types of trading scams and frauds that you should avoid. 

Prime Bank Frauds

Prime bank frauds incite traders and investors who believe in conspiracy theories of privileged and high-class people having accessibility to the most profitable and money-making securities and investments. Such traders believe that common people do not get entry to that world of massive profits.

Prime bank frauds promise for tripping or doubling your returns and for you to become a privileged investor with access to prime banks. 

The main problem is that prime bank investments and securities do not exist in reality!

Do not fall for such trading frauds which claim to double your investments quickly or give unimaginable high return with prime securities. 

Broker Frauds

Always question brokers for unidentified and ambiguous fees, unregulated trades, or any other financial disruption. Many fraud brokers overcharge and keep extra money in their pockets. Some brokers may also recommend investments that do not go well with your portfolio just to garner larger commissions.

Also, always facilitate any security trade with only authorised and directed brokers that are supervised by renowned organisations and institutions. Most relaible and trusted brokerage firms.

Advance Fees Frauds

Such frauds tend to steal fees that you might pay to take part in large acquisitions or trades.

Here, commonly you would be asked to pay some fee or a percentage of the total fee for large shipments of some commodities or some large trades.

Another example of advance fee fraud is some bank providing free of interest loans if you pay an advance fee for the application.

No matter what product or service you are offered, the main aim of such frauds is to ask for some advance fee to deliver that product or service later. But the truth is that it never arrives. It is just a scam to steal money from your pockets.

International Investment Frauds

The laws and regulations that protect your money in your country do not follow when your money travels internationally. It would be best if you were super careful when investing internationally because domestic regulations do not work in that case.

You must know and keep in mind the process of laws and regulations of the countries you are investing in. Otherwise, it is like putting yourself in waters filled with dangerous crocodiles.

Precious Metals Frauds

There are many ways in which you can encounter frauds while investing in metals.

There are chances that coins or bullions can be graded falsely with higher quality inscription.

Mining fraud is another common example of metals frauds. Here, you will be given an offer of new technological advancements to mine from worthless and closed mines.

Anytime the metals are offered at lower prices than their current value in the market, take it as a red flag. 

Ponzi Schemes

This is one of the most common types of investment frauds that many traders and investors fall for. 

A Ponzi scheme refers to any offer of high returns with the lowest of investments to entice traders to put in the money. They primarily are pyramid schemes that are useless in action. 

Such schemes depict high payments from many investors which gives other people the confidence to invest too. 

But in reality, no investment takes place. 


Above mentioned were the most common types of trading scams that you should know of. 

The key points to be taken care of from the frauds we talked about are:

  • The securities, and brokers which are regulated and authorised have a low chance of risks and frauds associated with them.
  • The investment frauds come in all shapes and sizes and can even change and advance their ways to commit fraudulent activities.
  • The best way to protect yourself from such trading scams to be aware of them, learn about them, and catch them red-handed. 

If you get stuck in such ype of scams you can contact Fast Action Refund 

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