The Forex Catfish Scam

“It was beauty killed the beast.” King Kong, 1933

You can’t scam someone who doesn’t trust you. This is why scammers use every trick possible to make themselves seem legitimate and to earn your trust. They also realize that reason can be circumvented by emotion. Greed, curiosity, and the possibility of romance often overcome common sense, and all scammers know this. They also know that if you can combine greed with the possibility of romance, you have a powerful emotional cocktail that few can resist.

In principle, the basic Forex scam is relatively simple. Forex trading (foreign exchange trading) is simply the exchanging of one currency for another in the hopes of making a profit by buying low and selling high. As someone who has lived in a number of foreign countries for decades, I have, by default, become sort of a Forex trader. From my own experience, it’s very difficult to figure out why currency goes up one day and down the next. Sometimes I win and sometimes I lose. Generally, I hedge. It’s a safer strategy but doesn’t make the huge profits most investors are hoping for. But keep in mind that the failure rate of Forex traders is variously estimated to be between 70 and 95%, so most people who become Forex traders are destined to lose money. In fact, 80% of Forex traders quit trading in two years.

On the surface, this would seem like the worst market to invest your money in. How is it possible to convince someone to invest thousands of dollars in a market that is almost guaranteed to lose them money? Imagine the rush to invest if the situation were reversed: If you would have a 90% chance of making money. Yet, apparently, people are rushing into Forex despite all the evidence that they should not. It’s probably due to the ‘someone has to win the lottery’ syndrome. In short, greed triumphs over fear.

That said, some people may still take some prodding to part with their hard-earned cash. In such cases, good sales techniques must be employed. In far too many cases, persuasiveness often comes in the form of a pretty face. Yes, it seems like more men are victimized by Forex scams than women.  According to one study, men are more likely to be victims of financial fraud than women by a 70% to 30% margin. Older, wealthier men are the main targets. So what on earth would persuade a wealthy, older man to invest in what in financial circles is called a ‘negative-sum game’. You guessed it; the chance for a romantic relationship with a beautiful, young woman. That’s where dating sites and apps enter the picture.

The scam, then, begins with an elderly man on a dating site or app, like Tinder, being contacted by an attractive woman. Of course, the man may be skeptical and the scammers know it. Imagine being contacted by this actual Forex scammer on Tinder.

Would you enter a conversation with her or just dismiss her outright as a scammer? Sure, you’d at least give her a chance and wait for her to show her hand.  Naturally, you’d do a reverse image search.

I did an image search and found nothing. This might be because the image search algorithms are not fine-tuned to Asian faces or this image appears on some Asian internet site. Altering the image in some way can also baffle the algorithm. Then again, she could be a normal person whose photo was found on social media. So, if you, as a potential victim or date seeker could not find this person on a reverse image search, you may be one step closer to thinking you’ve been contacted by a real person looking for a relationship.

If she is a scammer, she will have only a few photos on her profile page and very little information. This is because scammers don’t have a lot of time to waste making detailed profiles. She will also probably be an Asian woman from Hong Kong, Shanghai, Macau or Singapore. She will quickly ask you to chat on WhatsApp or Line. She will claim to have a private business and show you pictures to indicate that she is quite wealthy. Then, after a little small talk, she will begin telling you that she’s made most of her money by investing in Forex because she has an uncle, or other associate, who has inside knowledge of the Forex market. At some point, a bot will kick in and will only respond to Forex questions. In the end, she will then encourage you to try investing for free, but more of that later.

By now, every scammer knows the danger signals the potential victim is looking for. They read posts like this more than victims do in order to learn about some of their own shortcomings. In so doing, they have polished their attacks.

Recently, a contributor to one of the reddit sites explained how he nearly fell for this Forex scam even though he was well aware of how they operate. As he writes, “I’ve recently fallen prey to a complex and advanced scheme. When I say complex and advanced, I mean it was not obvious that I was being scammed, or that the person I was talking to was not who they said they were.”  These are the tests that the scammer passed.

-Invested a lot of time in me. Hours and hours, over weeks. (Shared 100,000 words between us. Enough for 90 pages at 11 font.)

-I made phone calls with the person I was talking to, and they had a female voice. Also daily voice messages.

-There was a high level of interaction, and the scammer had a good memory for things we’d talked about in the past. They had a good intellect, and smart, original things to say about what we discussed.

-It felt like a real relationship. I was falling in love with the scammer.

-I received many pictures that seemed to verify identity.

-None of the photos sent were in any reverse image searches.

That said, he did admit that, “the fact that I was starved for the positive attention of an attractive female allowed me to overlook a few things that didn’t make sense…The only red flags were why she was so interested in me…  I was mostly just happy to have found someone who was excited to get (to) know me, and who seemed to like me very much.”  

Apparently, somewhere, likely in the victim’s profile, was a mention of his interest in investing. This could be why the scammers took so much time grooming him. The potential for financial awards would be worth the extra time invested. And, sure enough, the alluring scammer finally brought up the topic of Forex investing. But, even this did not alert the victim right away. “she’d send me pictures of her trades. Since I also expressed that I had this interest, it did not set off alarms. I figured she was trying to show me that she too knew a thing or two about it.” To make a long story short, she told him to download the MetaTrader App and to let her analyst help him make money. MetaTrader is a legitimate app but it is often manipulated by scammers because it offers a free trial period. Fake brokers will manipulate the app to make it look like a fortune could be made in a short time. Once you invest, the notices you will receive will be manipulated by the scammers to show that you are making lots of money and you are encouraged to invest even more. Whatever money you invest will never be seen again. It goes straight into the bank accounts of the scammers who really care nothing about the Forex market.

If you think this was just an isolated incident, think again. In January, INTERPOL put out an alert on financial fraud connected to dating sites.” INTERPOL’s Financial Crimes unit has received reports from around the world of this scam and is encouraging dating app users to be vigilant, be skeptical and be safe when entering into online relationships.” There have since been a number of arrests in a variety of countries.

But it hasn’t stopped this scam. In fact, as I write this, men all over the world are being scammed by beautiful Chinese women. The ultimate scammer-test used to be to ask the scammer to participate in a video call. They would almost always find a reason why they couldn’t do this because, more than likely, they weren’t the same person that appeared in their photos. They may not even be female. However, this seems to have changed. More and more victims have claimed that they actually talked to the person via video. One potential victim asked the scammer to strike a particular pose and take a selfie. To his surprise, she did.

Other scammers have groomed a victim for months before bringing up the investment angle. At that point, the man (or woman) is so locked into the relationship and so emotionally dependent on this person that they simply deny the truth. Never underestimate the power of denial. As the man who received the photo above noted, “photos of pretty people is apparently all it takes for a situation to escalate into anything from a minor shakedown to financial devastation.” There’s a lot of truth in that. Look what happened to King Kong.

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