Forex scam alert after Saudis lose $10bn in five years

RIYADH: Saudis were warned on Tuesday against falling for apparently lucrative financial opportunities after investors lost more than SR38 billion ($10.13 billion) in five years to unauthorized foreign exchange dealers.
The scammers offer credit facilities of up to 700 percent, but instead they liquidate the funds and often abscond with the cash.
The Ministry of Commerce, the Capital Market Authority (CMA) and the Saudi Arabian Monetary Authority (SAMA) have warned the business community against dealing with suspicious websites that seek investment and trading in securities.
“This issue has been going on for a long time in different forms,” Dr. Majed Al-Hedayan, a senior legal and corporate affairs expert in Riyadh, told Arab News. “It has become a social crime.
“This is a very easy way for such fraudulent companies to gain illegal money. One of my friends, who is a lawyer, received a call on Monday from a forex trading company, and was convinced by their promise of 30 percent profits. “He paid them SR10,000, only to realize later that it was a fraud. Now he is lodging a complaint to get his money back.”
Government bodies could help to stop fraudulent forex activities by raising awareness about the problem and highlighting the number of scams being investigated or punished so that unauthorized companies learned a lesson and refrained from fraudulent activities, he said.
This type of crime affected more than two parties, he said. It should be considered a social crime, meaning public prosecution could play an important preventive role.
The ministry, the CMA and SAMA have launched an awareness campaign to warn potential victims against investing in securities and currency trade, including foreign exchange, with unlicensed companies.
The campaign includes a warning of legal action against websites or individuals promoting this kind of illegal activity.

Forex scam alert after Saudis lose $10bn in five years