The Commodity Futures Trading Commission (CFTC) is alerting the public against rampant financial scams and frauds targeting common people. Yesterday (Tuesday), the regulator’s Office of Customer Education and Outreach (OCEO) issued a public advisory highlighting the repetitive nature of these scams and frauds.

The warning explicitly stressed that victims may be targeted multiple times, sometimes by the same criminal gangs. It further highlighted that trading fraud victims are often targeted by fraud recovery scams or even recruited to launder money for criminal enterprises.

The Rampant Financial Scams

Financial scams and frauds come in many forms. Some target victims with imposter platforms, while the more sophisticated ones gain trust for weeks or even months before pitching fraudulent schemes.

One prominent and sophisticated scam occurs on social media and online dating platforms. Commonly known as pig butchering scams, criminals approach potential victims on online platforms and build relationships before pitching fraudulent schemes to them.

“We tend to see this in what we call relationship confidence frauds or what the perpetrators call pig butchering frauds,” said OCEO’s Director, Melanie Devoe. “These frauds in and of themselves are heinous crimes that leave victims with significant losses and broken hearts. Then, the victims are harmed again by fraud recovery schemes or are convinced to open bank accounts and move stolen money.”

People Must Take Precautions

The regulator advised people not to mix money with long-distance relationships and to be cautious of calls, text messages, letters, or emails from people or companies they’ve never contacted.

However, a joint survey by Finance Magnates and FXStreet found that clones of brokers and signal providers are top threats to retail traders.

Source: A joint survey by Finance Magnates and FXStreet

Other precautionary measures include ensuring that the trading platforms are registered and headquartered in the United States. The agency even sounded an alarm against regulatory imposters and reiterated that “the government will never email, call, or text you demanding money.”

Earlier, the regulator of Cyprus issued multiple warnings against imposters impersonating regulatory officials and targeting traders and companies alike.