Fintech scams are getting more common these days and relying on the industry to solve the issue is simply not enough. As a trading company, OctaFX has useful insights to face this situation.
Fintech solutions seem to be really popular these days, especially since the start of the pandemic. According to a report from Market Data Forecast, the global fintech market is predicted to grow and reach a market value of $324 billion by 2026, growing at a compound annual rate of about 25.18% between 2022-2027. Many people also believe that fintech is starting to replace traditional financial services in various industries like payments, banking, social commerce, etc. Therefore, it is expected that the global fintech market demand will increase in the future.
Unfortunately, such rapid expansion of the fintech industry doesn't always come unscathed. Fraud and scams have become more common in the fintech market, exposing new vulnerabilities for fintech users and developers. In fact, there was a 70% increase in payment scams across fintech products in 2020-2021. There were also a 200% rise in the digital wallet sector and a 140% increase in crypto exchanges.
It has become clear that the fintech industry needs stronger security measures as soon as possible. However, waiting for the industry to solve the issue of fintech scams might take some time. In the meantime, it's best to know how to recognize fintech scams and protect ourselves. As a trading company, OctaFX has some useful insights for this particular matter.
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Top Fintech Scams to Watch
There are many types of scams in the market, but these 3 are the most common and should be on your top-watched schemes:
1. Phishing
Phishing is a type of scam that usually attacks via email. The email might seem to look like it's from legit companies such as banks, brokers, or payment service providers. The goal is to steal your personal information like your bank card details. It might even ask you to install some malware on your computer, which later corrupts your device and demands ransom for unblocking the system or recovering your files.
Here's an example of what a typical phishing attack looks like:
2. Copycat
OctaFX reminds traders that another attack that you should be aware of is called copycat. As the name suggests, copycat refers to a web that clones an actual broker or other fintech services. These sites can actually clone really well these days, making it harder for users to recognize the fraud. The difference might lie in a single letter in the web address, while the rest of the content is almost or entirely identical. If you click on these websites and make a deposit, your money and your bank card details simply go to the criminals.
3. One-day Scam Company
The third type of fintech attack that you might come across involves creating a one-day company, like a forex broker or crypto exchange. The idea is to attract new clients and lure them into making deposits in the company, then disappear the next day, taking all the collected money with them. Alternatively, they might also charge extremely high trading fees that quickly drain your pocket if your trades are unsuccessful.
The good news is that this type of company is usually easy to recognize. Such companies typically don't have a long history of providing financial services and have never been featured in any news or media. Lastly, it's also pretty obvious that scam brokers never receive awards from widely-known international organizations or entities.
How to Protect Yourself from Fintech Scams
If you're looking to participate in the fintech industry, it's highly recommended to take precautionary actions to avoid scams such as:
- Conduct your own research. You need to be able to recognize the scam before you can avoid it. This is why market research is very important. You can start by looking for reports that contain information about the company, such as how the platform works, whether the platform is regulated or not, who the developers are, and how many people are employed by the company. You can also see the company's track record to see if they are legit or not.
- Use domain-checker extensions. This is an important step to identify the authenticity of the broker's local page. If you find out that the domain name is different, then it's either a fraudulent website or the intellectual property is used illegally.
- Beware of social media. Most fraudsters like to nest on social media and mask their appearance. Always make sure that you only follow and interact with the company's official account. Usually, the list of the company's social media accounts is featured on their official website.
- Double-check before making any payments. Make sure that all of your payments are processed through the OctaFX Personal Area on the broker's official site or app. If you are asked to make payments through other channels like personal transfers or messenger apps, then you are most likely to be scammed.
- Keep your personal information secret. Never share any personal information on the internet or give access to your wallets before knowing the legitimacy of the requester. Also, use strong passwords and activate two-factor authentication (2FA).
- Be careful with suspicious emails. Do not click any link or download any type of file attached to an email sent from an unknown address.
Final Thoughts
Scams and frauds exist in practically any industry, not just fintech. And every year, there are new types of attacks that can trap any internet user from all around the globe. While we might not be able to recognize every single one, it's helpful to just stick with the classic phrase: "If it's too good to be true, then it probably is."
In other words, do not be easily fooled by unrealistic high profits or jaw-dropping bonuses with zero fees. Always check the platform's legitimacy before registering.
If you're looking for a reliable broker to facilitate your trades, OctaFX is a great place to start. The regulated broker has been around since 2011 and is well-known for its trustworthy online trading services in over 150 countries. For new traders, OctaFX offers commission-free access to financial markets and a wide range of tradable assets, along with free educational articles, webinars, and more. There are also many useful analytical and risk management tools to help you reach your goal.
OctaFX is an international Forex broker that operates worldwide. The domain belongs to a group of companies called Octa Markets Incorporated which is registered with St. Vincent and Grenadines FSA. Currently, the company focuses on Asian, South African, and Australian markets. OctaFX.com does not accept European clients as this market is specifically appointed to OctaFX.eu (regulated by CySEC).
11 Comments
Oct 29 2022
When exploring potential brokers, OctaFX stands out as a reliable choice with its reputable online trading services in over 150 countries since 2011. In terms of fund protection, I'm curious to know if OctaFX offers segregated accounts to clients and what specific measures they have in place to ensure the security of traders' funds while keeping them separate from the broker's own assets. Can you provide more details on OctaFX's approach to fund protection and the additional safeguards, such as regular audits or regulatory oversight, that contribute to the overall safety of client funds within segregated accounts?
Jun 9 2023
@nick: Hey there! OctaFX does provide segregated accounts to their clients. This means they keep your funds separate from their own moolah. It's like having your money in a different pocket, so there's less chance of it getting mixed up or misused.
But wait, there's more! OctaFX takes extra steps to ensure the safety of your funds. They work with reputable banks, so your money is kept in trusted financial institutions. That way, you don't have to worry about their financial troubles affecting your hard-earned dough.
And here's the kicker. OctaFX goes the extra mile by getting regular audits done. They bring in independent third-party firms to check their books and make sure everything is on the up and up. These audits help maintain transparency and ensure they're following all the necessary rules and regulations. It's like having a trusted mate keeping an eye on things and making sure everything's legit.
Speaking of regulations, OctaFX operates under the watchful eye of the Cyprus Securities and Exchange Commission (CySEC). This means they have to play by the rules and meet certain standards to ensure the safety of your funds. It's like having a responsible authority figure making sure everyone's doing the right thing.
Nov 10 2022
I agree with your sentence In other words, do not be easily fooled by unrealistic high profits or jaw-dropping bonuses with zero fees. As a matter of fact, as some users and buyers, we always interesting at something that can safe our money such like zero fees or free product and service or even profit without do anything . But when you think deeply about it and think as the one who give free, can the company survive and thrive if they are constantly spending money because their users don't pay for the services and products (100% free, no promotional discounts). Is it posibble? Even if we we still paid for the electricity bill. So it make sense if there are strong indications that that seller/company/fintech will sooner or later become a scam if they keep their services/products free for us.
Nov 28 2022
Riyand: Well said! Unfortunately, the amount of people not realizing this is alarmingly high. It is very unfortunate because they often ended up being scammed and then blame the industry for their own ignorance.
Nov 30 2022
@Riyand: Absolutely! It's important to approach offers that promise unrealistic high profits or jaw-dropping bonuses with zero fees with a critical mindset. While it's understandable to be attracted to the idea of saving money or receiving free products and services, it's essential to consider the sustainability and viability of such offerings.
When a company consistently provides free services or products without any form of revenue generation, it raises questions about their long-term financial stability. Businesses need income to cover their operational costs, invest in research and development, and ensure sustainable growth. If a company solely relies on offering everything for free without any promotional discounts or revenue streams, it becomes challenging to maintain a viable business model.
Even though users may not directly pay for a service or product, companies still incur various expenses, such as employee salaries, infrastructure costs, and utility bills, including electricity. If a company cannot cover these costs through other means, it becomes increasingly difficult for them to continue operating without generating revenue.
May 18 2023
How can we know if a website is simply another copycat of the original? Every time I visit a website, my antivirus sends me a warning about its safety. Additionally, the website has SSL encryption, making it secure to enter. However, assuming the copycat website is extremely sophisticated and has replicated all the aforementioned features perfectly, what can we do to identify and avoid falling into the trap of copycat websites? Any suggestions on how to protect ourselves from these deceptive websites?
May 28 2023
@Lidya: I totally get your concern about those sneaky copycat websites! It's important to be on the lookout and protect ourselves from falling into their traps. Here are a few simple tips that I got to help you stay safe:
Watch out for funky website URLs. Copycats often use URLs that look similar to the original, but with slight changes or misspellings. Example, OctaFX become OtcaFX.
Check for security features. While SSL encryption is a good sign, it's not foolproof. Look for other trust indicators like security seals or trust logos on the website.
Be wary of sketchy emails and links. Don't go click-crazy on links you receive in emails or from random sources. Copycats love to trick people with phishing emails and dodgy links. Always double-check the sender's authenticity and hover over links to see if they match the official website.
Look for contact info and customer support. Legit websites usually provide clear contact details like phone numbers, emails, and physical addresses. If a website lacks that info or gives you the runaround, that's a red flag right there.
Keep your antivirus game strong. Make sure you have a reliable antivirus program and keep it up to date. It'll help sniff out and block malicious websites and suspicious activities.
Trust your gut.If something feels fishy or too good to be true, trust your instincts. It's better to be safe than sorry. Steer clear of websites that give you that uneasy feeling.
Jun 10 2023
OctaFX is not the most ideal choice for many traders. On the one hand, this broker offers very low trading fees, charges no fees for deposits and withdrawals, and offers a great copy trading service.
On the other hand, OctaFX is inherently poorly regulated in Indonesia and has a very limited range of trading instruments to trade compared to other brokers: 40 Forex pairs, 5 commodities, 10 indices, and 39 cryptocurrencies.
If you don't mind the above issues, you'll get a low-cost broker with a fairly standard setup: Two accounts with a minimum deposit of 25 USD, a slick mobile app, and a good range of trading tools. OctaFX also highly promotes a wide range of bonuses and can offer 1:500 leverage on Forex pairs.
Jul 13 2023
@Queen: Absolutely! I completely agree with the statement about OctaFX not being the most ideal choice for many traders. While they do offer some advantages such as low trading fees and no fees for deposits and withdrawals, there are certain drawbacks to consider. One major concern is their limited regulation in Indonesia, which may raise some red flags for traders who prioritize regulatory oversight. Additionally, their range of trading instruments is relatively narrow compared to other brokers, with a limited ion of Forex pairs, commodities, indices, and cryptocurrencies.
However, it's important to note that if these issues don't bother you and you're primarily focused on low-cost trading, OctaFX could still be worth considering. They provide two account options with a minimum deposit requirement of 25 USD, offer a sleek mobile app, and provide a decent range of trading tools. It's also worth mentioning that OctaFX actively promotes various bonuses and offers leverage of up to 1:500 on Forex pairs.
Jun 20 2023
OctaFX is regulated by the Cyprus Securities and Exchange Commission (CySEC) and is registered with the Financial Services Authority of St Vincent and the Grenadines (SVG FSA):
Octa Markets Cyprus Ltd is an investment company registered in Cyprus and regulated by CySEC since 2018. It allows users to trade with brokers under the supervision of European regulations with an enhanced level of protection.
Octa Markets Incorporated is registered with Saint Vincent and the Grenadines (SVG FSA).
The company was regulated by the UK's FCA (Financial Conduct Authority) from 2015 to 2017 , but decided not to renew its license after the Brexit referendum in favor of maintaining its focus on the EU market.
Industry Recognition: OctaFX has received a lot of industry recognition in recent years, winning Best ECN broker 2021 (World Finance), Decade of Excellence in Forex Asia 2021 (Global Banking and Finance Review), Best Forex Broker Asia 2021 (Global Banking and Finance Review) , Most Transparent Broker 2020 (Forex Awards), Best Forex Broker APAC 2019 (Global Banking and Finance Review), and Best Mobile Trading App 2019 (European CEO Magazine).
Jul 14 2023
Hey, I've been reading about the importance of keeping our login credentials secure, and I came across this advice to use strong passwords and activate two-factor authentication (2FA) for added protection. It got me wondering, when we activate 2FA on our trading accounts, can we trust that brokers don't have access to our actual passwords? Like, do they know what our password is, or is it kept completely confidential? I mean, it's reassuring to know that we can add that extra layer of security with 2FA, but I'm curious about how it works and if it ensures that our passwords stay private. Plus, what are the other benefits of using 2FA? Does it really make a significant difference in keeping our trading accounts safe? I'd love to hear your thoughts on this!