Mmegi Blogs :: Which do you want to be?
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Last Updated
Monday 24 September 2018, 15:01 pm.
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Which do you want to be?

The same old questions keep coming in. Im not complaining about them, in fact none of the Consumer Watchdog team are impatient about them because the questions were asked are all so important.
By Consumer Watchdog Fri 21 Apr 2017, 13:40 pm (GMT +2)
Mmegi Blogs :: Which do you want to be?








We’re asked, for instance, repeatedly about hire purchase and how readers can get out of the mess hire purchase leaves them in (they can’t). They also ask us about contracts they’ve signed, wondering if they can escape them (they can’t). They ask us about whether they can have their insurance policy premiums refunded after they cancel a policy against which they never claimed (they can’t).

Most recently, there have been two very commonly asked questions, ones that people ask us over and over again.

The first is whether they should “invest” in forex.

Let’s start at the beginning. Forex is an abbreviation for “Foreign Exchange”, the process of exchanging one currency for another. Anyone who’s travelled internationally will know the process. However, you’ll often see Forex being advertised as a way of making lots of money very quickly. The idea being sold is very simple. Sign up on an online trading platform, send them money and you can start trading between various currencies, trying to buy some cheap and sell them when they improve in value.

It sounds simple but the truth is very different. Despite what the salespeople will tell you, Forex trading has the potential to ruin your finances. A reader contacted us asking about one particular website that offers to multiply (“leverage” is the technical term) your investment by up to 200 times, effectively giving you millions of pula to trade with. What they neglect to tell their potential customers is that it works both ways. Yes, if you can correctly predict the fluctuations in the exchange rates between currencies you might make some money but they conveniently forget to tell you that it also means you can lose your entire “investment” almost immediately if the exchange rates go the other way. Within minutes of searching online you’ll find many stories of people who had lost millions in moments trading Forex.

Another issue that the forex salespeople neglect to mention is that forex trading is competitive. As a forex trader you’re trying to outwit and be smarter that other forex traders. For everyone who bets on the dollar, pula or yen and wins, someone else loses. But who exactly are you fighting against? In fact, you’re probably not competing against other normal people like you and me, you’re actually competing against experts with PhDs in mathematical sciences employed by banks and investment companies and increasingly against highly developed algorithms running on massively powerful supercomputers. Do you really think you’re likely to win when you’re fighting against people and machines like these?

People better qualified to comment than me, such as the North American Securities Administrators Association, have commented that “forex trading by retail investors is at best extremely risky, and at worst, outright fraud.” The US Commodity Futures Trading Commission issued a warning to consumers that said: “If you are tempted to invest, make sure you understand these products and above all, only invest what you can afford to

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lose.” Doesn’t this make you VERY cautious? It certainly should. Another newer question that we’re asked very often indeed is whether people should “invest” in Bitcoin. The answer must begin with a description of what Bitcoin actually is.

Bitcoin is a currency, but not like any currency you’ve known before. It’s a digital currency, sometimes called a virtual currency or a cryptocurrency. There are no coins or notes with Bitcoin, no bits of metal or paper, nothing you can put in your wallet or purse. Bitcoins exist purely in cyberspace. Think of it as online money but nothing like MyZaka, Orange Money or eWallet, they’re just ways of moving pula from one place to another. Bitcoin is a currency itself.

And that confuses people. What confuses them more is the technology behind Bitcoin. Terms like “blockchain”, “distributed ledger” and “Bitcoin mining” are hard to understand unless you’re an expert. There’s also the simple confusion that your money is “out there” somewhere and not in your pocket. That’s something new and confusing.

But Bitcoin is real. It’s very high risk, very volatile and the value of Bitcoins has been known to drop dramatically as well as increase dramatically but it’s a real thing.

The problem is that as well as Bitcoin there are plenty of schemes pretending to be like Bitcoin. Schemes like OneCoin, Pipcoin and also the various pyramid and Ponzi schemes like MMM Global and the Bitclub Network. None of these things are real in the way Bitcoin is real. They’re all just exploiting our ignorance of these new technologies. We had some news recently about how dangerous these fakes can be. In Kazakhstan the Ministry of Finance’s Economic Investigation Service arrested a number of OneCoin “investors”, describing it as “a criminal scheme”, suggesting that as much as US$7 million might have been taken from victims.

Onecoin also recently had many of its accounts in Germany frozen by the German Federal Financial Supervisory Authority once they realised that it was “one of the most dangerous money games of recent years” and that it was probably a “collaboration between the Bulgarian and Russian mafia”. It’s estimated that as many as 25,000 victims might have lost as much as $424 million, over P4.4 billion. And guess what? None of them will get a single thebe back. Organised crime syndicates and the Bulgarian and Russian mafia aren’t going to do the decent thing. Criminals don’t offer refunds.

The lesson is simple. Anyone selling any scheme who claims you can get rich quickly without being a certified, qualified and a recognised financial expert is almost certainly lying. Worse still, they’re not just lying, they’re actively trying to steal your money. Your choice is simple. Would you rather be the cautious member of your family and circle of friends who thinks before handing over their life savings or the one who gives away their money to the first hoodlum who walk past? Your choice.

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Consumer Watchdog
Fri 21 Apr 2017, 13:40 pm
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Exchange Rates
FOREIGN EXCHANGE: Wednesday, 17 Jan 2018
FOREIGN / PULA
PULA / FOREIGN
1 USD = Pula   9.7656
1 GBP = Pula   13.4590
1 EUR = Pula   11.9617
1 YEN = Pula   0.0882
1 ZAR = Pula   0.7938
1 Pula = USD   0.1024
1 Pula = GBP   0.0743
1 Pula = EUR   0.0836
1 Pula = YEN   11.34
1 Pula = ZAR   1.2597
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