You want to get started trading but have been warned about the many forex scams and crypto scams out there. Fraudulent brokers are no longer as obvious to spot as they once were. They don’t necessarily have poorly written website copy or mediocre design. Some of the following brokers’ websites look sleek and professional.
They may boast of top-tier regulation, excellent reviews, and outsized returns on investments. However, these claims may not be true, but it is hard to know until customers have already signed up. However, if you have lost money to fraudulent brokers, there are still steps you can take to get your money back.
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.
The Problem of Scam Brokers
Online trading, along with internet activity in general, has increased dramatically in the past few years. The COVID-19 pandemic accelerated this trend towards online shopping and trading because of lockdowns that kept many people at home and in front of their computer screens. Financial uncertainty leads many people to find new ways to make money.
Our team meets with many people who decided to take up trading when they were out of work or underearning. It is never a good idea to invest or trade as a way of getting out of debt or to imagine that it is possible to become a full-time trader with no prior investing experience.
However, desperation may lead many to get rich quick schemes, this may make people vulnerable to crypto scams and forex scams. The pandemic, financial insecurity, and increased internet activity formed a perfect storm that fueled the online trading trend that has been unstoppable and doesn’t look ready to end anytime soon.
In fact, the online trading market is expected to read $12.6 billion in 2022. With the increased enthusiasm for online trading, more scam brokers pop up. Fraudulent schemes always seem to attach themselves to trends. Whenever something becomes fashionable, there are always knock-offs and fake versions and the same is true of brokers.
How Do Scam Brokers Operate?
Scam brokers must constantly seek new clients. They often do so aggressively by recruiting people on social media. They could cold-call potential clients or send spam emails or Whatsapp messages.
The desperation to find a large number of new clients should be a tip-off for a fraudulent scheme. Legitimate brokers who are providing value for their clients can usually maintain a long-term relationship with them. They may actually turn away business because they want to focus on creating returns for their current clients.
Therefore, if you see brokers who seem hungry for more people, that may be a sign to check the license and the size of the broker. Large, established, and licensed brokers may advertise, but they may not seem as desperate as small-time broker scams.
Unreliable brokers do not want traders who know what they are doing. They will advertise highly-popular forms of trading, such as forex, crypto or binary options that people have heard about but may not understand. These are assets many consumers think they understand, but they are far more complex, volatile and risky than people think.
Scam brokers often choose to offer these risky assets such as forex, crypto, and options because they can claim that the money was lost in a moment and the client doesn’t have the knowledge or resources to prove them wrong. If the value of the assets moves quickly, it is harder to pinpoint the exact time when losses allegedly happened, and brokers can easily hoodwink clients.
Fraudulent brokers will try to get people to sign up fast without providing any thorough terms and conditions to read. The last thing they want is for people to do research on them. Instead, they will entice new clients by claiming there is a quick trade they must make within the next few hours or they will miss out on the opportunity of a lifetime. The client then will move quickly and open an account without realizing they are walking into a trap.
Many of these brokers will accept cryptocurrency or bank transfers. They tend not to like credit card deposits because of the relative ease of getting money back through credit card chargebacks.
The clients will either lose money with this initial trade or they will seem to make some money. In the former case, the broker will tell them they will make money in the next trade if they act fast. In the second scenario, the broker will return a bit of money to the new client to inspire confidence. The client will then deposit more money because they trust the broker.
The scam broker will make excuses rather than allow the client to withdraw money. They may charge huge fees or claim there is some rule about not releasing funds unless the client has made a certain amount or has signed up for a minimum amount of time. Sooner or later, the broker will cut off communication with the client and may even disappear entirely with all of the clients’ funds. Sometimes, people only realize their money was being traded with a fraudulent broker when it is too late.
What Are Some Scam Broker Red Flags
The following are things to watch out for:
- Unregulated broker
- Promises of huge returns
- Aggressive manner
- No contact information
- Very little transparency
- Large fees or commissions
- Does not allow withdrawals
- Stops communication
What If You Have An Account with One of These Scam Brokers?
If you have traded money with any of the brokers on the list or if your broker is showing any of the above-mentioned red flags, withdraw your money immediately. If the broker won’t allow you to withdraw your money, seek assistance from ReportScamOnline experts right away.
ReportScamOnline Professionals Will Help You Win Your Chargeback
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.