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How to protect yourself from a Scam Forex Brokers
Scam Forex brokers – this is the name of companies that at some point stop withdrawing funds to their clients. In the case of a planned fraud, the money of traders and investors is not brought to the market, but is located inside the company. It also happens that honest brokers do not stand up to competition, or become insolvent due to external economic reasons. For example, the broker Alpari UK in 2015 was unable to pay money to clients after the collapse of the Swiss franc.
Scammers can cancel trades, not pay money to traders, and then disappear with the clients’ funds. The broker’s services may be working at this time, which misleads many traders. Technical support does not respond or delays with answers.
You can find out that this is a scam forex broker by some signs:
- The company guarantees the profitability of trades. In the Forex market, no one can give any guarantees, there are always risks and losses. Scam brokers often lure clients with promises of guaranteed income of up to 50-150% of their investments. Examples of fraudulent brokers are Forex MMCIS group and Panteon finance.
- Bad reputation. Traders massively leave negative reviews, in particular, about the inability to withdraw funds.
- The lack of reliable deposit/withdrawal systems or the disappearance of one of them. The payment system itself may refuse to work with the broker due to numerous complaints about fraud.
- Fake license. You can check whether the broker has a license on the website of the regulators. The most reliable regulators are the NFA and FCA.
- Failures in the operation of the trading platform and other broker services.
How to protect yourself from a scam?
To start working with a Forex broker and protect yourself from scammers, you need to find out how long the company has existed. Experienced traders advise to work with trusted brokers who have been on the market for more than 5-7 years. It is necessary to study the reviews of brokers, check the Blacklisted brokers list, which is updated by various resources. You need to examine where the company is registered and check its license.
It is recommended to use Visa and Mastercard bank cards for depositing and withdrawing funds. If there is no such payment option, the chargeback procedure becomes impossible. Chargeback is the only way to get money back from a scam broker. Profits from Forex transactions are not returned, and chargeback takes a long time, up to six months. The bank officially cancels the operation, transfers the money back from the broker’s account to the trader. To start the procedure, you need to write a statement indicating the Reason code.