Financial Supervision Authority warns against a club intermediating investment services
According to information received by the Financial Supervision Authority, people have been offered to earn large profits on sums invested through an organisation called FXClub ( www.fxclub.info/en/index/ ). The Financial Supervision Authority warns that this is very likely a "moneymaking club" or pyramid scheme. People joining the club are promised income only after paying the joining fee and recruiting new members into the scheme. However, joiners to any pyramid scheme earn no additional income on the invested sums and, as a rule, they also lose their deposit. The deposits of new members go to the creators of the fraudulent scheme.
According to information received by the Financial Supervision Authority, FXClub has made offers to earn interest income on sums invested through the club 8% a month on average in case of low risk and up to 30% a month in case of high risk. To earn the desired income, one is asked to join FXClub. A joining fee of 470 USD is to be paid to a bank in Panama as well as an additional charge of 110 USD for opening a bank account. All settlements are to be made in US dollars and the only bank available for such settlements is a bank in the Republic of Panama.
FXClub's offer has characteristics of common financial fraud and may therefore constitute an untrustworthy offer better to be avoided. To raise credibility, the form of the offer has been drawn up thoroughly and in detail, a deposit is required and only a foreign bank is used for settlements.
In case of financial fraud it is common that a deposit is required as a service fee, joining fee or any other seemingly necessary payment. It is also possible that a person is announced to have won a lottery where he or she has not participated, but to receive the prize it is necessary to pay a certain amount of money or buy a service. Fraudsters may ask for credit card numbers, passwords or other personal data. The Financial Supervision Authority urges people never to give or send money, personal data or bank requisites to anyone before making sure that the transaction is reliable.
All offers to make a profit that seem too good to be true are generally not true. In case of doubts, it is always advisable to check whether the service provider has an activity licence.
In the Republic of Estonia, the provision of investment services is regulated by the Securities Market Act. According to the Act, a person who wants to operate an investment firm must have a relevant activity licence issued by the Financial Supervision Authority. Information on investment firms and banks operating under licence can be obtained on the website of the Financial Supervision Authority www.fi.ee/?id=285. The Financial Supervision Authority confirms that it has not issued an activity licence to the legal person FXClub or Forex Marketing.
If the location of a company providing investment services is another European country, it is possible to check on the websites of the financial supervision institutions of other countries whether the company offering investment services has been registered in that country, or to send the financial supervision of that country a written inquiry on the matter. Addresses of websites of the financial supervision institutions of other countries can be found at www.fi.ee/?id=1149.