Grygo is the chief content officer for FTF & FTF News.
Just in time for Valentine’s Day, the CFTC has issued a Customer Advisory that is meant to serve as a warning for people who use online dating and social media platforms but get pulled into scams where they send money to “fraudulent websites that claim to trade foreign currency exchange (forex) contracts, precious metals contracts, or digital assets.”
The advisory is part of a national effort, known as “Dating or Defrauding?” The multi-agency push is increasing awareness about the threat of romance scams, according to the CFTC, which offers a repository of customer education materials at: https://www.cftc.gov/LearnAndProtect
“While romance scams are not new, they can defraud people of any age, including individuals who are more comfortable with online dating and buying digital assets. Fraudsters may use comprehensive social media profiles and well-practiced scripts to convince their victims that they want to start a romantic relationship,” according to the CFTC. “Within a few weeks, or even less, the fraudsters may coax their victims into believing they are in a caring relationship.”
(Image by Patrick Perkins on Unsplash.)
Once trust is established, the fraudster focuses on “money, salaries, and the markets,” and poses as a successful trader. They can also suggest that a family friend or relative is a star trader that can help with FX transactions, precious metals, or digital assets. There is one key factor that the fraudster leaves out — the trading platform is also fake. The all too real result is that “due to the nature of these scams, the victims rarely recover their funds,” according to the CFTC.
So, the advisory offers 10 tips to help people protect themselves and avoid these frauds. These are good tips that firms could share with clients that may be vulnerable to fraud.
From the CFTC: 10 Ways to Protect Yourself and Your Money
- Keep conversations on the dating or social media platforms. Many platforms utilize harmful language filters that can detect fraud. Fraudsters want to quickly move conversations to private messaging apps to avoid detection.
- Screen capture the love interest’s profile picture or other pictures and use reverse image searches to see if they have been used in other scams or by other people.
- If contacts refuse to meet or video chat, that should be a red flag. Try other ways to verify their identities in real-time. For example, ask the person to send a selfie holding a piece of paper with your name and date next to his or her face.
- Check to be sure the people or firms you trade with are registered with federal or state authorities. Relying on registration alone won’t protect you from fraud, but most scams involve unregistered entities, people, and products. Learn more, visit cftc.gov/check .
- For forex trading, check with the National Futures Association, nfa.futures.org/basicnet .
- For virtual currency, see if the platform is registered as a money service business with the Financial Crimes Enforcement Network (fincen.gov/msb-registrant-search ) or with your state using the Nationwide Multistate Licensing System ( www.csbs.org/nationwide-multistate-licensing-system ).
- Never make payments or give sensitive information to anyone you’ve only met online.
- Before making any investment, get a second opinion. Talk it over with a financial advisor, trusted friend, or family member.
- Don’t trade in markets or products you don’t fully understand.
- Never pay more money to get your money back. If you suspect fraud, report it immediately to the Internet Crime Complaint Center, ic3.gov, or cftc.gov/complaint .
The CFTC notes that more information about romance scams can be found at www.consumer.ftc.gov or other reliable websites. In addition, more about spotting and avoiding FX, precious metals, and digital asset frauds can be found at www.cftc.gov/LearnAndProtect The full text about CFTC’s new advisory can be found here: https://bit.ly/360s4z2
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