A core part of the Forex Fraud service involves sharing information to help traders stay safe. We can’t tell you with any conviction if the market’s going up or down. But we can offer thoughts on how to choose a safe broker so that if you do make a profit, you can still get your money back to your ‘home’ account.
Our monitoring of the markets and the ‘trader experience’ takes many forms, including Live Chat, telephone research and compiling tip-offs from traders. Something we’re noticing at the moment is an uptick in the number of traders being caught out by unregulated brokers and scammers.
Understanding Why Might There Be More Scammers About?
A variety of factors could explain this and the truth is only the scammers will know for sure. Anecdotal evidence points to the phenomenal surge in the price of Bitcoin and other cryptos, causing FOMO and luring some first-time investors into the market. Therefore, an individual about to open their first broker account should study how to tell if your broker is legit before going ahead.
The second possible catalyst is COVID-19 lockdowns. With social interaction being restricted, some traders entering the market do so without their usual support network in place. There’s nothing like a friend in a bar saying “really?” to make you double-check if the firm you are considering using is a trustworthy broker.
Lockdown also makes it harder to pick up the positive feedback from those who have traded with good brokers. However, the Forex Fraud list of Safe Online Brokers is an excellent starting point in the absence of face-to-face meetings.
Using the Crowd to Spot a Dodgy Broker
With this in mind, it’s probably worth picking out some of the trends we’re seeing among scammers, so you know what to look out for. Do remember our catalogue of Brokers to Avoid can offer some help – though, of course, no list is ever complete.
If you have suffered a bad experience with a broker, please do consider sharing it with us on our Complain About a Broker page so that we can publicise the name of the firm. The community of traders does rely on crowdsourcing of information and alerting others to the scammers goes some way to developing a ‘herd immunity’ of another kind.
How to Avoid Getting Caught-up in Forex Fraud
As mentioned, Forex Fraud, like most reputable sites, does not claim any certainty about which way the market is heading. We’ve been around too long to say we can do that, and also appreciate that profitable trading is based on managing what you don’t know as well as what you do.
This is mentioned because it relates to the first of our – tell-tale signs of a scammer:
- Overpromising in terms of performance returns or their knowledge of the market – if something appears too good to be true, it probably is.
- One recent trend is unregulated brokers writing reviews about themselves. When getting the low down on the broker, it’s worth checking out if sites are linked or if the review site is bona fide. Forex Fraud has been conducting reviews for years; they are all regularly updated, resulting in this list of safe brokers for you to consider.
- Some brokers pepper their site with information on rules and regulations. That doesn’t mean they are regulated. If they are – they’ll tell you. One place to check is the bottom of each page where regulatory approval details should be published.
- Reading the small print on a site can save you from losing money to a scammer. Checking the web address can also help. If the site isn’t protected by HTTPS secure protocols, you’re probably swimming in shark-infested waters.
- Taking someone’s word for something can sometimes work out, however, to double-check go to the home site of a regulator and check that the firm shows up on the regulator’s database.
- It’s also important to be vigilant to ‘phishing’ attacks to prevent fraud.
- Confirm the sender’s identity before replying to email requests or opening attachments or clicking on links.
- Never give out personal information over the phone. The teams at regulated brokers will never ask you for your login details directly.
- Make your password hard to crack and update it frequently.
- Consider setting your account to two-stage authentication every time you log on.
- Maybe select a broker like Plus 500 that is proactive about managing your access to the platform. They have an inactivity kick-out timer, and while that can at times be frustrating, it’s better to be safe than sorry.
- If you doubt an incoming call is from a legitimate source, put the phone down and call that broker’s help desk directly.
- There has been an uptick in ‘cold calling’ and aggressive ‘marketing’. Many scammers divert calls via telephone numbers in a host country. If your gut feeling tells you something is wrong, then take notice!
What to Do If a Scam Broker catches You Out
Even the most risk-averse can be caught out. There is, unfortunately, a lot of it about. If that does happen to you, then be sure to never send good money after bad and be wary of ‘reclamation’ firms that offer to get your money back, for a fee of course.
That’s all part of the same slippery slope. The best option is to stick to using regulated brokers. Considering everything they go through to gain their licence and to comply with rules and regulations fully, it’s a shame that some traders do still use unregulated brokers and never see their money again.
How to Make Important Decisions
Choosing a safe broker is the most critical trading decision you’ll make. Even if you buy Bitcoin at the bottom and sell it at the top, it will count for nothing if you don’t get your money back.
You have more control over your broker choice than you do the markets and information is power. Utilise whatever resources you can to check if a broker is bona fide and even if you’re new to trading, your gut feeling has been built up over a lifetime – so do please listen to it.
If you want to know more about this topic or have been scammed by a fraudulent broker, please contact us at [email protected]
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