Pamms Are Scams! How to Avoid Frauds?
While Internet-business is developing, differed gaining chances for everyone appear. You can luckily invest, open your own business or find a high-wages job.
But along with real ones, there are frauds and scams, where you will anyway waste deposits and time.
We are to talk about so-called "scam-companies" that have ever existed on the Net and how to dodge them.
You'll get known about frauds at PAMMs, Forex and so on.
2.Kinds of Scams!
4.Which PAMMs Are Scams?
6.How to Avoid Frauds?
8.Bad Beginning Is Fatal!
There have always been lots of scams and frauds. But their activity has increased in the end of the XX century. Then, pyramid schemes (such as Russian MMM) appeared. Russian MMM, however, got very popular and acquired many depositors - standing quite long. And nowadays some kinds of differed pyramids like that or smaller can be found.
In modern times, those cheaters have moved to the Net. They can't be easily reached this way, and, it's simple to delude naive guys remotely.
Anyway, scams can be met and they're alike the Hydra: on the place of destroyed scheme at least two new ones appear.
Kinds of Scams!
Actually, I won't name all scams can be faced with. Let's figure out two kinds of scams: forex scams and unreliable investment companies offering your deposit management - at forex.
How can they cheat people? We are to look into it.
Today forex investments don't look reliable for people, because most lose money there. But trading mistakes and other risks, related to unfair brokers' activity must be distinguished.
We are to clear up how brokers can make a scam:
- Brokers can change rate charts. For example, if EUR/USD rises in price, most traders buy it and wait for profits. Then, a broker can change the direction of the chart which will waste all traders' orders. Guess where this wasted money comes? Surely, to brokers' accounts! You can check it comparing your terminal's chart with the one of another broker or a real exchange.
- Brokers also love to make adjustments in traders' orders. For instance, you've bought a rate for 1.5000, and in an hour you discover 1.5500 buying order. It can lead to great losses or done deposit. That's why traders are recommended to make screenshots of their orders once opened. However, it doesn't help much.
- In those cases I've described, brokers seemed to be quite fair. But if one of them decides to take everything, they will delete your account with the whole deposit and the terminal. But be advised: if you lose your account access, don't immediately think the company is a scam. Firstly, try to ask administration. It can be just a technical breakdown. But if a broker ignores you, that's a trap and almost impossible to return money.
- Further goes the complete insanity - when a broker stops all payments or even shuts a site down. All communications are down, too. Most likely that the scheme is done and no one will get money back.
- There are some brokers, however, which are scams but don't eager to cheat everyone. They just use your money not for original purposes. For example, you have a forex deposit. But your funds come not to the exchange but someone's account, etc. Sometimes your money can be invested by them into another scheme. And then, when the scheme is done, the company cannot pay you back because of its bankruptcy.
When PAMMs Are Scams?
- Traditional schemes can be frequently met among investment companies offering PAMM deposits. Here's the story of an ordinary scam. There opens a company, advertises insisting on 100% profits per month. Quite attractive, and several really invest. A month passes and those who invested gain their deposit back with 100% profits. They're pleased and tell their friends about a brilliant company. And here is it! The scheme has hundreds of depositors! Another month passes - gaining again, but most investors don't want to withdraw their money keeping them in accounts for more future profit. Surely, quantity of clients increases, and there are thousands of depositors. Several more months pass and many depositors have solid accounts, and some of them want to withdraw at least a part of gains. But there's a trap - payments are stopped. The company can explain it with difficulties with transferring money from offshores, ask you to relax and continue investing. Depositors are driven to panic, and then it comes clear when company’s office closes, site is shut down, phones are off. Thus, everyone realizes PAMMs are fraud and they became victims of a scheme with no hopes for refunds.
You should see that investing in such a pyramid-scheme, you can earn if exit in right time without trying to gain easy millions. Those cheaters are not supposed to grab first investors’ deposits. They usually give them a chance to gain, tell about that, work for a while and only then they disappear forever.
- The second case is quite similar to the first one with the only difference about the money loss reason. If it is bankruptcy there, here this is the fail of a trader managing your funds at the exchange. Actually, he was originally earning and then made a mistake having lost all the money. According to the agreement, there is no payback for the depositor. Such schemes live longer, because most believe administration.
Who is faulty about such schemes’ existence? People are! Those who believe they can earn 1000 $ per day without any special knowledge. If you think so, registering at such scheme’s site, investing in that, do not blame its creators – they’re experienced in finance (in contrast to you) and gain well for that.
How to Avoid Frauds?
- You should realize that enormous profits are the first sign of such a scheme. Just think of it – if one could earn millions without any efforts, where would all those workers and office clerks be?
- Before deposing in any company, think about profits of the company itself. Widely known that any business is created for gaining. And if you can’t find any possibilities for the such a company, it will earn by frauds.
- I can understand that it’s boring to read all these agreements – but you should. And pay attention to suspicious terms such as “the company can change the agreement” or “the company takes no responsibility for money invested”. If you are going to invest good funds, spend some more for an attorney’s advising.
You are wrong to think fair forex or other scams do not exist. There are many open-structure schemes. They’re called “high-yield investment program”. Investors realize risks from the very beginning but nevertheless open accounts with a hope to leave the scheme until it’s done.
Bad Beginning Is Fatal!
Usually, when they say that some organization is scam – that’s too late. All the transactions are already over, site is down and cheaters themselves are leaving for a remote island. Noneedtoraisethealarm. Yourmoneyislost. Actually, though, if you are a prosperous investor with rich relationships, you can try to find cheaters and prosecute them.
Pyramidalschemesarenotlossesforsure. If you recognize scam in time, you have a chance to leave and gain some from such risky investments. And after the regular pyramid’s breakdown some yell “PAMMs are scams!” and “Forex is scam” while others cherish their refilled wallets. Which group do you belong to?