Investment &
Trading Scams

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    Investment Scams

    From year to year, the number of reported scam cases has been rising. Consequently, the monetary losses due to scams are getting larger and larger. When you take a statistical overview of investment scams, compared to other types of fraud, it would appear that the number of investment scheme victims is small. Don’t let this data fool you, investment scams are extremely dangerous.

    As active members of the MBX team fighting against fraud, we’ve witnessed firsthand the devastating impact of investment fraud on individuals and families. Far too often, people lose their entire life savings to these malicious schemes, while banks and other relevant institutions fail to provide adequate protection against these crimes. We at MBX are determined to change that.

    In this section, our goal is to spread awareness about investment scams and equip our readers with practical tips and advice on how to steer clear of them. By sharing our knowledge and experience, we hope to empower individuals to recognize the warning signs of fraud and make well-informed decisions when it comes to their investments. Armed with this information, our readers can protect themselves, their families, and their hard-earned savings from the disastrous consequences of investment scams

    Types of Investment Scams

    There are numerous types of investment scams, each with its unique approach to luring unsuspecting victims. However, many of these schemes share a common underlying principle: the promise of guaranteed, high returns with little to no risk. As members of the MBX team, we understand that the appeal of such opportunities can be strong, especially in times of uncertainty or personal hardship.

    We want to emphasize that falling for these scams is not a sign of greed or lack of judgment; rather, it’s a testament to the sophistication and persistence of the scammers who prey on people’s hopes and dreams. Investment scams can differ greatly in their methods and strategies, but they often share the same goal: to take advantage of people’s trust and desire for security.

    At MBX, we are committed to helping individuals stay vigilant against these threats, offering support and guidance to those affected by scams, and fostering a culture of understanding and compassion for victims of fraud.

    Fraudulent Brokers

    The world of investment trading has become plagued with fraudulent trading platforms, swindling brokers, and money traps. These scammers often churn out fake broker trading sites which are offering seemingly attractive investment opportunities in various markets, such as forex, binary options, and CFDs.

    However, in reality, they don’t actually make any trading or investing for their misfortunate clients, they just steal their money. The crooks behind fraudulent brokers manipulate the trading environment, making it impossible for investors to achieve any real returns or even withdraw their funds. To better understand how these scams function, let’s take a closer look at each of these markets and the specific scams associated with them.

    Forex Scams

    Foreign exchange (forex) trading involves the buying and selling of currencies, and it’s one of the largest markets globally. Forex scams often involve fraudulent brokers or platforms that entice investors with promises of high returns and low risk. These scammers might manipulate trading conditions, spreads, and prices to ensure that investors continually lose money or they may simply disappear with the deposited funds, leaving investors empty-handed.

    Binary Options Scams

    Binary options are a form of trading where investors bet on the price movement of an underlying asset within a specific timeframe. Binary options scams typically involve fraudulent brokers or platforms that manipulate the outcome of trades, ensuring that investors lose their money. In some cases, these scammers may even prevent investors from withdrawing their funds or demand additional deposits before allowing withdrawals.

    CFD Scams

    Contracts for Difference (CFDs) are derivatives that allow investors to speculate on the price movement of an underlying asset without actually owning it. CFD scams often involve fake trading platforms or unregulated brokers that manipulate the trading environment, spreads, or leverage to generate losses for investors. In some instances, they may even lock investors’ accounts or refuse to process withdrawal requests.

    MBX Tip: Only trade with regulated brokers. To check if your potential trading platform is safe go to the site of your country’s regulating body and check whether your broker is registered. If not, stay away.

    Ponzi Schemes

    Pyramid scams and Ponzi schemes are a type of investment fraud that has been around for over a century, yet they continue to deceive and ensnare unsuspecting investors. These scams operate by promising investment packages that bring unbelievable returns on the deposit. In reality, there is no legitimate investment or business operation generating profits. Nevertheless, the crooks are using the funds from new investors to pay returns to earlier investors, creating the illusion of a profitable business.
    The scheme relies on a constant influx of new investors to keep the scam afloat. That is why this form of fraud has a built-in affiliate program that entices existing victims to recruit new ones. Eventually, when the flow of new investments slows down or stops, the Ponzi scheme collapses, leaving the majority of investors with significant losses.

    At MBX, we have witnessed how Ponzi schemes have damaging effects on families and even entire communities. Be extra careful when a cousin or a friend comes with an amazing investment opportunity. They might have good intentions, but they might be leading you into a scam.

    MBX Tip: Always do your research into an investment opportunity. If the program offers high returns on deposits while not explaining clearly how they are generating returns, it’s best you stay away.

    Pump and Dump

    These tricky schemes have been a concern in the world of stock trading for quite some time. However, MBX staff can tell you that old scams constantly evolve into new modern versions with more dangerous money traps. Similarly, pump-and-dump fraud has also recently gained traction in the rapidly evolving crypto market.

    Pump-and-dump scams typically involve the artificial inflation of a stock or cryptocurrency’s value through the dissemination of false or misleading information and even high-pressure tactics. Scam targets start buying the stock and as a consequence, the value of the stock or cryptocurrency keeps rising.
    Once the price is artificially inflated, the scammers behind the scheme sell their holdings at a profit in an instant, causing the value to plummet and leaving unsuspecting investors with substantial losses.

    The anonymity and decentralization of the crypto market make it an attractive playground for pump-and-dump schemes, as scammers can operate with less scrutiny and regulation.

    MBX Tip: Don’t succumb to FOMO (fear of missing out) and high pressure. Take a breather to do your research and see if there is something fishy going on with the investment opportunity.

    Fraudulent Brokers on Social Media

    In the age of social media, a new type of investment scam has emerged involving self-proclaimed investment gurus. These individuals often use platforms such as Instagram, Twitter, Facebook, and TikTok to promote themselves as successful traders or investors, luring in unsuspecting followers with promises of incredible returns and low-risk investment strategies.

    These so-called gurus typically showcase their luxurious lifestyles, expensive cars, and other material possessions as proof of their success, giving the illusion that they have unlocked the secret to wealth. They may offer paid investment advice, courses, or signal services, promising to teach followers their “proven” methods for success. In reality, these gurus often have little to no real investment experience and are simply profiting from the fees and subscriptions they collect from their followers.

    MBX Tip: Don’t engage with investment gurus on social media, the only good thing they are good at is stealing people’s money.

    Unregistered Securities

    Another type of investment scam involves unregistered securities, which are instruments that have not been registered with the appropriate regulatory authorities. These scams exploit the lack of oversight and regulation surrounding such securities, making it easier for fraudsters to deceive investors with false promises of high returns and low risk.

    Unregistered securities scams can take various forms, such as initial coin offerings (ICOs) in the cryptocurrency market or private placement offerings in more traditional markets. Scammers may promote these investment opportunities through unsolicited emails, social media, or even in-person events, using high-pressure sales tactics to lure investors into their schemes.

    These scams often involve exaggerated claims about the potential returns and the credentials of the individuals or companies behind the investment. In some cases, the securities may not even exist, or the underlying business may be a complete fabrication. Investors who fall for these scams risk losing their entire investment, as there is often little recourse for reclaiming funds from unregistered securities.

    MBX Tip: Do your due diligence, try to find as much information as possible about the company, check if they are registered, who their founders and employees are, and other relevant information. Similarly, check whether there are scam warnings on official sites, social media, and forums.

    Don’t Let Investment Scam Crooks Win! Take Action with MBX Guide

    The goal of MBX is to educate investors about the dangers of investment scams and the importance of conducting thorough due diligence before investing in any instrument. By being aware of the red flags associated with these scams and ensuring that any investments are registered with the appropriate regulatory bodies, investors can better protect themselves and their hard-earned money.

    Unfortunately, even with all our efforts, scammers succeed in deceiving people. When that happens we are here for you. At MBX, we are dedicated to fighting scams and helping victims reclaim their lost funds. If you’ve fallen victim to an investment scam, don’t hesitate to reach out to our team for assistance. Our step-by-step guide is always available to help you with your self-recovery process. We are here to provide the tools, knowledge, and support you need to claim your money and avoid future scams.

    Not sure if you have a case? Get a Free Consultation from our experts!

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