Forex scams are a dime a dozen on the Internet. Here’s how to sort the reputable money transfer companies from the disreputable ones.
Online currency converter
Most foreign exchange transfer websites have a currency converter, which supposedly tells you what rate you will get if you transfer money through them right there and then. But often the fine print (which you need a degree in Computer Sciences to find) will say that the rate you see is an ‘indicative’ rate. This is a market rate only available to banks and brokers and is not indicative of the rate you will receive.
Most money transfer websites shy away from transparency, because to a site visitor, their rate will obviously seem worse than the rest. Of course the opposite is true, which is why you should always use a money transfer company where the rate you see is the rate you get.
Some money transfer companies will charge a hidden fee. They might shout that they charge 0% commission, but in the disclaimer they casually mention the ridiculous admin fee. You will of course only find out about the fee when less money than expected arrives on the other side. The other way they con you is to guarantee they charge you no fee whatsoever. When less money arrives on the other side and you phone to find out why, they tell you it wasn’t them, but the bank that charged the fee. What they don’t tell you is that they have a deal with the bank. If you try to get your money back, you will once again be charged.
Scam websites don’t stay around for too long, but it is possible to get caught by one if you’re in the wrong place at the wrong time. These websites will look genuine and legitimate, complete with telephone numbers and live chat facilities. They will claim to give the best rates and even have testimonials on their site. You register and give your details for the transfer only to find out days later that your money never arrived. When you go back to the website to seek justice, you realise that the numbers and web addresses are false, and there is no way to get hold of anybody. Don’t get conned in this way – if you are suspicious, it’s probably fake. If it seems too good to be true, it’s probably fake. Check for contact details and try the number, google the company, check for a weird URL and/or check to see who owns the website on WHOIS.
Believe it or not, there are also many instances of clients scamming legitimate money transfer companies. Herman Howell, 1st Contact Forex Manager, experienced this first-hand.
“I had a money transfer client whose information all checked out and who raised no suspicion until the day the bank called,” Says Howell. “We were told to immediately halt the most recent transfer, without raising suspicion or giving the client any information. It turned out he had a boiler room type operation and that some of his ‘clients’ had lodged a complaint against him. Eventually the money was returned to his UK account and the complainants were refunded their money, but not after he promised to show up at our offices with a baseball bat to ‘meet and greet’ me.”
“We have also had instances of clients pretending to be someone else,” says Howell. “We receive passport copies and utility bill copies – complete with ‘copy of the original’ stamps. On one such occasion we noticed that many of the copies were signed and checked by the same bank. When we contacted them, they confirmed our worst suspicion: someone had stolen the bank’s stamp and was using it to ‘certify’ passport copies and the like!”
To ensure you’re not a victim of a scam – or even unscrupulous over-charging – always use a money transfer company that has been around for many years, has favourable online reviews, and is 100% transparent in their fees, their compliance policies, and the exchange rate you will receive.