ASIC warns businesses over foreign exchange scam

The Australian Securities and Investments Commission has issued a warning over a foreign exchange scam which has been sucking in Australian businesses.

The scam involves a fake website promoting foreign exchange broker First Forex.

The regulator says First Forex and related entities Fifx and FiFX Global promote their services at www.fifx.com and falsely claim their services are “under the regulation of Australia (Regulation No. 290600)”.

But ASIC commissioner Greg Tanzer said neither First Forex, FiFx or FiFX Global are registered Australian companies, nor are their services regulated as a financial services business under Australian law.

“The website, www.fifx.com appears to be operated overseas and refers to an Australian company that is in no way associated with First Forex”, Tanzer said in a statement.

Tanzer recommended only dealing with financial services providers which are licensed by ASIC.

“Licensed companies and individuals are required to meet stringent requirements under Australian law, the purpose of which is to protect consumers,” he said.

Janine Cox, senior analyst at Wealth Within, told SmartCompany there are a few similar scams going on at the moment where companies “almost clone” the name of a company.

“In this particular case it looks like they are targeting Asian investors,” she says.

“The issue is that people are often looking for where they can save money or do things cheaper and they are the ones who can get caught up in these scams.”

Cox says SMEs should do their research before handing over any money.

“Cheap is not always cheap because you can cost yourself a lot of money,” she says.

Cox recommends doing a search on ASIC’s website looking for public warning notices and looking on the Australian Competition and Consumer Commission website Scamwatch. 

“You can also look up the company’s ABN number – is it a registered business number and does it have an Australian financial services licence?”

The details of an Australian financial services licence should be at the bottom of the website for all financial services businesses if you scroll down. 

Cox says while technology is making it easier for scammers to operate, the problem is an old one.

“The bottom line is it comes down to human nature,” she says.