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A broker scam is a traditional approach. However, it came into the limelight with a popular term, ‘unregulated broker’. They are con artists whose only aim is to steal hard-earned money from honest people. They are experts in their field.
In Today’s scenario, even a regulated broker can perform a scam. Hence, here we are going to cover what is a broker scam and several red flag situations that trap people.
Before we start, let’s understand;
Who is a broker?
Technically, a broker is a person who acts as a mediator between an investor and the investment market. But, when we apply this theory in the present world, it fails the structure of brokership. Of course, we are not blaming every broker for taking advantage of their client, but most of the time, swindles may happen with newbie investors and at times with experienced ones because of their pride.
Good broker Vs. Bad Broker
A good broker is a person who works in two ways; they recruit an account manager for trading purposes who plays a fair game. They believe in the theory of a win-win situation and do not entertain any kind of misleading activity. Here, the broker only calls you during an emergency, such as a security or documentation issue.
The second way of dealing is for their executives to call you to provide updates on the share market and digital coins. Then, they motivate their investors to purchase or invest their money in the right direction to earn a handsome return. Again, it is a well-structured and ethical business practice.
On the other hand, some greedy brokers, termed as unregulated brokers, do not have an account manager in place. They recruit retention agents.
Out of their greediness, brokers make up a strategy to accelerate client losses in the hopes of earning money. These brokers hire an executive or a calling person whose job is to call the client in order to accomplish their lousy work.
Sales and Retention agent
It is an evil portfolio. The sales and retention agent is the same person. First, the salesperson will call the client, asking them to deposit their money in a select share. Their work is just to call and force them to do as they say. They get a lot of commission on their every deposit; hence, they do not know what kind of person they are calling. The person might be dying, already in debt, or may simply be uninterested.
For instance, if any client gets converted, the same person holds the position of retention agent. This person starts talking to the client and tries to build trust to maintain a relationship.
It is a ridiculous way of making a fool out of someone. Unfortunately, many people are tricked by this. They provide the alluring offers to their clients. They encourage the clients to lubricate or deposit more to make a considerable return.
What are the activities taking place while performing broker scams?
There are some astonishing successful broker scams performed worldwide. Even developed countries such as the USA, UK, Australia, Canada and many more suffered these broker scams. They have a robust security system, but a minor crack lets the fraudsters in.
Let’s have a look at some of the multi-billion dollar scams.
- An agency has reported that in 2016, $16 billion was stolen from victims, by different frauds and identity thefts. In 2020, US residents were conned for over $20 billion, only from phone scams.
- Before 2019, it was close to $10.5 billion. One more report has stated that every year, American investment fraud costs around $10 million to $40 million. This is because some of the victims refused to report the cases.
- In 2019, UK institutions reported £1 billion-plus lost in fraudulent activities.
What are the Red Flags?
Newcomers interested in investing money should be aware of these red flags.
- You may receive unsolicited cold calls, emails or personal messages.
- A need for urgency will be created so that you start investing under pressure.
- They will claim themselves as a part of the legal exchange team.
- They build trust by showcasing their identity as an investment broker or account manager.
- These scammers will share some promotional offers to trick you.
- If you deposit more than expected, more ‘offers’ related messages will drop-down in your inbox.
It is just the starting; once we start falling into their trap, it becomes more puzzling. There is no way out. It is never disclosed where they pulled up your account information and how they merge it with themselves. (In this case, the victim only shares the credentials, as the fraudsters sugarcoat their ideology to the clients)
Suppose you get to know that there is something smelly cooking, and your gut feeling is telling you to get out of this mess. You can do it, but they will try to steal from you by warning you about identity theft. But, there is nothing to worry about because when all doors seem to be closed, there is a way out with Financial Fund Recovery. It is an online platform launched to overcome such dominating fraudulent issues.
Wrapping up:
We feel awful for the people who become victims of such events. But it is also true that we will devise a possible course of action and provide a definitive solution. We request all our readers to spread awareness and discuss it with other people who deliberately want to be a part of it. There is always a dark side ruining your futuristic money-based plans. So just be careful and contact us anytime.
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