Forex trading can be exciting and profitable, that is, if you have some knowledge of the markets, are willing to accept some ups and downs, and trade with a regulated broker. Unfortunately, many forex brokers do not have a license and are not motivated to create a return for clients. They simply want to charge fees and in some cases even keep the money that their clients deposit into brokerage accounts.
So how can you avoid unscrupulous forex brokers? The first step is to consult a list of forex brokers that have been flagged as suspected scams. ReportScamOnline experts have done a thorough investigation and have compiled this list of dodgy forex brokers. If you have lost money to a forex scam, talk to us about fund recovery solutions.
ReportScamOnline is staffed with professionals who will work on your behalf to improve your chances of getting your money back. We have extensive experience with the chargeback process, wire recall, crypto recovery, and intelligence reports and are experts at dealing with all types of scams and winning disputes with merchants and brokers.
What Is Forex Trading?
Forex is an abbreviation for “foreign currency exchange.” Forex trading is based on comparing currency pairs. For instance, if you feel that the US dollar will rise against the euro, you will purchase a currency pair that favors the dollar.
Some people feel they have some experience with foreign currency trading by changing money on vacation. For instance, any time people delay changing money and predict they will get a better rate in a day or two, they may feel they are doing something that resembles forex trading. However, actual forex trading is much larger scale than simply exchanging money during foreign travels.
Forex is the world’s largest market, and $6 trillion dollars in foreign currency exchanges are made daily. The size of the forex market makes it difficult to regulate. Unlike stocks, which operate within certain exchanges listed in specific countries, forex is an international market and there is no one country that governs it. Regulations of the market itself are difficult to implement, and this is one reason why unregulated brokers take advantage of the size and volatility of the forex market.
Because there is so much activity in forex, it tends to make dramatic moves in a short space of time. It operates over all time zones, so the forex market never sleeps. This makes forex trading a challenge. A person could go to bed with a currency pair doing well and wake up with their investment wiped out.
Successful forex trading takes time to master. Many forex traders who make money in this market have had huge losses in the beginning and have gained their skills through trial and error. That is why promises that novices can earn huge returns on forex should not be believed.
It is extremely unlikely that those who are new to forex will not lose at least some trades. This is because the forex market can move unexpectedly. A government can buy up huge amounts of dollars, for instance, to help its own exports and regulate the movement in its own currency. Seasoned forex traders may predict this could happen, but keeping track of policies in so many countries can be extremely difficult without experience.
The bottom line is that forex trading is as risky and volatile as it is exciting and fast-paced. In fact, the risk and the volatility are two reasons unscrupulous brokers choose to advertise forex trading services.
Why Are There so Many Forex Scams?
One of the reasons forex scams are so common is that forex is popular. Whenever there is a major trend, there are many people who come out of the woodwork to take advantage of the trend’s momentum. This is true of designer handbags, electronics as well as trading. People are attracted to the term “forex” and may sign up first and ask questions later.
Another reason these schemes are so common is that forex is volatile. It is common that beginners will lose money. Therefore, it is easy for brokers to convince their clients that they have lost money in a trade, even when the money was not traded at all, but ended up in the broker’s pocket.
The forex market moves so fast and be so confusing that a broker can easily persuade a customer that the money was lost. With a more stable and slower-moving market that is easier to understand, a customer could easily prove the broker’s statements are false.
How Do Forex Scams Work?
Forex scams work in a variety of ways. Many are Ponzi schemes, which means that no trading actually takes place. Any withdrawals are funded by deposits by new clients rather than from trades. That is why many brokers are unwilling to release funds to customers, but try to persuade clients to make additional trades even when they have lost money in the first trade.
The broker will aggressively demand new deposits and the client often complies because their original money is basically being held hostage. People who are the victims of scams often want to believe, apart from apparent evidence, that the broker may still be legitimate. The reason for this is they want to cling to hope that they will get their money back.
In addition to making money from repeated customer deposits, unregulated brokers make money through numerous fees and commissions. They will charge extra fees even when the client has not been informed of them at the beginning. If the customer complains, they will most likely block them and cut off communication. Many Ponzi schemes will continue to make money and then disappear without a trace.
What Are Some Signs of Forex Scams?
These are some red flags for forex scams:
- Not regulated
- High fees and commission
- No contact information
- No terms and conditions
- Negative reviews and warnings from regulators
- Aggressive manner
- Does not allow withdrawals
- Lack of communication
Sometimes, these cannot be detected at first, which is the reason why drew up this blacklist to warn customers ahead of time.
How to Use This Forex Blacklist
Our experts have investigated all of these brokers and have determined that they are suspected scams. We have a systematic screening process and have used our experience with scam brokers, warnings from regulators, and reviews from customers and experts in the industry to guide the compilation of this list. Avoid signing up with any brokers on this list, and open an account only with regulated brokers.
If you have lost money to any of these brokers or any other financial scheme, contact our professionals today.
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You can increase your likelihood of winning a chargeback claim if you have sufficient evidence and the help of excellent financial service. ReportScamOnline professionals will guide you on preparing your case and will help you get your funds back. We have combined decades of experience dealing with hundreds of financial institutions.
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