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Phoney forex dealers warned

30 August 2004 ANgelo Coppola

FSB warns against phony forex dealers.

TheFSB has warned that it has repeatedly encountered incidences where so-called foreign currency traders, or forex dealers, were in fact swindlers.

"The FSB is concerned that some investment entities solicit clients under the guise of being foreign currency dealers when they are in fact swindlers.

"Some may even be running boiler room operations or pyramid schemes," said Gerry Anderson, the FSB's deputy executive officer for market conduct and consumer education.

He said the full implementation of the Financial Advisory and Intermediary Services (FAIS) legislation on 30 September this year would bring foreign currency administrators into the regulatory net for the first time.

"The presence of fraudulent companies is unfortunate, as they taint the reputation of respected foreign currency managers and administrators," he added.

Besides being extra careful about offers that sound too good to be true, consumers should be wary when financial services providers play down the risks involved, or apply undue pressure.

It is also wise to gather as much information as possible about the entity that offers the service before committing to any deal.

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