# Financial Information and Scam Literacy Evaluate a trading claim and trace it to evidence. Use this workbook alongside the course. Write your answers before opening the solutions. Practical work is self-reviewed; scored knowledge checks are in the Academy. ## 1. Source evaluation ### Primary versus secondary sources A primary source directly reports the relevant data, rule or document. A secondary article interprets it. Both can be useful, but an interpretation should be traceable to the underlying material when a factual claim affects a decision. ### Publication date and revisions Record publication date, observation period and revisions separately. A recently published article may discuss old data, and a later revised series may differ from what participants knew at the time. Current-looking presentation does not establish current evidence. ### Conflicts of interest Identify incentives such as product sales, affiliate payments or positions in the discussed asset. A conflict does not automatically make a claim false, but it changes what independent checks are needed before relying on it. ### Distinguish analysis from advertising Advertising aims to persuade; analysis should expose assumptions, limitations and contrary evidence. A polished chart or technical vocabulary can appear in either. Judge the evidence and method rather than the production quality. ### Worked example An article published today quotes a reserve figure from last year. Calling it today's holdings would mix publication and observation dates. A careful summary names both dates and checks whether a newer release exists. ### Independent exercise Take a hypothetical claim about gold demand and list the original data source, observation period, publication date and possible incentive of the commentator. My inputs and assumptions: My calculation or decision: Evidence that would change my conclusion: ## 2. Performance claims ### Gross versus net results Gross performance excludes some or all costs; net performance should specify which costs are included. Financing, conversion and subscription charges can be relevant. Ask for a reconciliation rather than assuming the label net has a universal meaning. ### Selected trades and survivorship Selected trades can conceal losing periods, closed accounts or abandoned strategies. A complete record needs a defined start, end and inclusion rule. A list of impressive winners is not a sample from which reliable expectancy can be calculated. ### Backtest versus live record A backtest evaluates historical assumptions; a live record includes actual execution under specific conditions. A demo record has additional limitations. These are different evidence types and should remain labelled even when all show positive results. ### Unverifiable screenshots Screenshots can omit account identity, cash flows, open risk and costs. A screenshot may illustrate a result but usually cannot independently verify the full sequence of transactions. Seek reconciled records with enough detail to reproduce the calculation. ### Worked example A promotion shows ten winning trades but no rule for selecting them. Even if each screenshot is genuine, the collection cannot establish the win rate because the number and outcome of excluded trades are unknown. ### Independent exercise Explain what additional records are required to assess the promotion's expectancy and drawdown claims. My inputs and assumptions: My calculation or decision: Evidence that would change my conclusion: ## 3. Provider verification ### Identify the legal entity Identify the legal entity behind a service, not only its brand. Domain names, addresses and beneficiary accounts can differ from the advertised identity. Those differences need an explanation before money or credentials are shared. ### Check the relevant official register Use the relevant official register to inspect authorization and disciplinary information where available. Confirm that the entity and activity match. An authorization in one jurisdiction or for one service does not automatically cover every customer or product. ### Understand what registration does not prove Registration is not an endorsement of performance or a guarantee against loss. It also does not prove that a message using the registered firm's name came from that firm. Verification must connect the communication to the entity. ### Identify impersonation and withdrawal red flags Impersonation can involve copied logos, cloned domains and stolen registration details. Pressure, secrecy and unusual payment requests are material warning signs. Pause and verify independently rather than allowing urgency to replace the checking process. ### Worked example A sender provides a genuine company number but asks for funds to an unrelated beneficiary. The number verifies that a company exists; it does not explain why the beneficiary differs or authenticate the sender. ### Independent exercise Draft an independent verification response that does not use the sender's supplied contact link. My inputs and assumptions: My calculation or decision: Evidence that would change my conclusion: ## 4. Personal safeguards ### Protect credentials and recovery codes Protect account credentials with unique passwords and supported multifactor authentication. Recovery codes and email access can be as important as the trading password. Store them securely and do not share them with someone offering to improve account returns. ### Avoid remote-access pressure Remote-access requests can expose accounts, files and recovery methods. A caller's confidence or claimed affiliation does not establish authority. Use official support procedures and understand exactly what access a troubleshooting step grants. ### Keep account records Preserve statements, agreements, communications and transaction identifiers. These records support reconciliation and any later complaint. Deleting an embarrassing interaction may remove information needed to understand or investigate it. ### Use official support and complaint channels Use official support and complaint routes appropriate to the service and jurisdiction. Describe dates, amounts and identifiers factually. Do not pay an unsolicited recovery service simply because it claims to know about a previous loss. ### Worked example After a suspicious call, a learner receives an offer to recover funds for an upfront payment. Knowledge of the earlier incident is not proof of legitimacy; it may be another attempt to exploit the same information. ### Independent exercise Write a short incident record and list immediate account-security checks after credentials may have been exposed. My inputs and assumptions: My calculation or decision: Evidence that would change my conclusion: ## Course project Write a source-quality review of three hypothetical promotional claims. ### Self-review rubric - Concepts and reasoning: 25% - Calculations, data and evidence: 30% - Process and risk controls: 25% - Limitations and communication: 20% Record one correction and one next practice task. This rubric is not automatically graded. ## Worked solutions ### Exercise 1 The review should distinguish the data producer from the person interpreting it and identify dates and incentives explicitly. If the underlying release cannot be located, the claim should remain unverified rather than be treated as established. ### Exercise 2 You need all eligible trades over a defined period, costs, cash-flow treatment, open-equity observations and inclusion rules. Without these, both average performance and peak-to-trough loss can be selectively represented. ### Exercise 3 Find the official entity record and contact route independently, compare the website and beneficiary, and request clarification through the verified channel. Do not send funds while the identity mismatch remains unresolved. ### Exercise 4 Record the communication, time and affected accounts. Use official channels to secure credentials and recovery methods, inspect account activity and preserve evidence. Treat new unsolicited recovery offers as unverified rather than as a remedy. ## Further reading - https://www.cftc.gov/LearnAndProtect/forexfrauds - https://www.investor.gov/introduction-investing