A Forex Scam is any trading scheme used to defraud individual traders by convincing them that they can expect to profit by trading in the foreign exchange market. One such example of someone who has come under such scrutiny is James Dicks. These scams might include churning of customer accounts for the purpose of generating commissions, selling software that is supposed to guide the customer to large profits ,improperly managed "managed accounts", false advertising, ponzi schemes and outright fraud. It also refers to any retail forex broker who indicates that trading foreign exchange is a low risk, high profit investment.
The U.S. Commodity Futures Trading Commission (CFTC), which loosely regulates the foreign exchange market in the United States, has noted an increase in the amount of unscrupulous activity in the non-bank foreign exchange industry.