Today, is plenty of Forex Broker Scams on the web: just google “Forex Broker” to see how many results you get. Unfortunately, among these results, probably you will find a lot of Shady Forex Brokers or even Scam Brokers.
Full of Scams
Scammers, as you probably know, are everywhere: specially in business where they can scam people with ease and at the same time, they can do a lot of money from their scams. It’s easier than you might think to “open” a Forex Broker today, especially if the purpose is to scam Traders. We will divide these Brokers into three different categories: let’s dive into the first one for now.
“Shady” Scam Forex Broker
These Forex Brokers, are “better” than the previous ones although, their purpose is the same: to scam people and take their money. Differently from the previous type of Brokers, these Forex Brokers are “real” Brokers: meaning that after that you will open an account with them, you will be able to login to the Trading Platform and then to trade. So, why are they a scam? Because they will do everything that they can, to try stealing your money. How? It’s easy. The web is full of stories about this type of Forex Brokers. There are endless ways for a Forex Broker to scam their customers or a part of their customers, because here is the key of the scam: they aren’t a “real scam” as the previous Brokers due to the fact that they will scam only a part of the clients, and not always the same clients (It means that today is your turn to be scammed, tomorrow will be our turn, and so forth).
In this way, not all the clients of the Brokers will have to complain: thus only a part of clients will complain and probably start posting bad reviews about them, whereas the other part will post good reviews. But it’s not finished yet: the vast majority of time, after that these Brokers have scammed few clients, the clients will surely contact their support to ask for an explanation. Here we go: these Brokers, through their customers support, will do everything to reassure the scammed clients saying something like “No, you’re wrong: it must be a mistake, are you sure? Can you check it again?” or “It’s not our failure, but we will do our best to fix it” or again “Tell us about the problem, then we will find a solution together” and so on. We think that you have already got the point: they will buy themselves time. They will always say you to wait a bit more and then everything will be alright but at the end, nothing really happens. But at least, they have reached their objective: avoiding a bad review left by a scammed client.
Time will pass, and sometimes or the scammed client will just forgive what was happened (Probably because the client is not trading anymore), or the scammed client will be fooled by the customers support and will believe that wasn’t really their fault, but it was solely a “connection failure” or something like that. In certain (And Rare) cases, the scammed client is even able to resolve the problem, specially when is related to withdrawals. Yes, because most of the problems are related to withdrawals with this type of Brokers: they won’t allow you to do the withdrawal and they will say to you to “wait” a week or two. Then again, to wait another week; and so forth. But sometimes, it may happen that you will receive your money for real after a long time of waiting: this is due to the fact that sometimes these Forex Brokers don’t have enough money to send all the withdrawals to their clients. Or more probably, they just select few “lucky” customers to which send the withdrawals, still buying time for themselves.
Here an example: 10 clients ask for withdrawals. The Forex Brokers allows just one withdrawal. Thus there will be 9 angry clients, that after X days (Normally 3-5 days, depending on the policy of the Forex Broker: because when you ask for a withdrawal from your account, there is a time to “process” the withdrawals, normally of 3 up to 5 days. However, with these type of Broker can reach even 10 days or more. Only after this time is passed, you can contact the customers support) will contact the customers support.
Now the Forex Broker will buy some time, through the customers support saying to them: “wait another week”. Then probably, they will send another withdrawal. So there are 8 angry clients now, that looks definitely angrier than before. The Forex Broker, through the customers support, will say to them an excuse for the delay of the withdrawals: more probably, will give them something like a bonus to trade on their account or similar (Don’t be fooled: the bonus follows a very strict policy: we will discuss about bonuses later). After another week, probably the will send the withdrawals to other two clients: so there will be 6 angry clients, although we would bet everything that at this point other clients will be scammed and the number will be higher than 7. The whole point is the following: the Forex Broker wants to show to their clients that, after waiting a ridiculously long time they will be able to obtain their withdrawals.
Therefore, the scammed clients, will think that doing the same (Waiting until they receive the withdrawal) will be more than fine. For this reason, they won’t complain anymore and most important thing, they won’t leave a bad review/feedback about the Forex Broker: they are still waiting for their withdrawals.
However, this was just an example: a Forex Broker, as already said, has endless ways to scam their clients. The Broker can for example, decide to not close a position when the client wants to close it and then saying that was just a “connection issue”; or vice versa, the Broker doesn’t allow the client to open a position during a profitable timeframe. The Broker can even enter in the account of the client, and then open some random positions to take its money: of course, the client will complain a lot and will accuse the Broker to be a scam. In this case, the client will surely leave a bad review wherever he can and then will threaten the Broker to report the fact to the police. Again, the Broker will try to buy some time. But even if the client will report the fact to the police or the right authority… Nothing will happen in the most cases (We will discuss about this article). Or better saying: there would be few chances that the scammers will be punished by law.
How to avoid this type of Brokers? Check the reputation of the Forex Broker before you open an account: Google (Or any other search engine) is your friend, in this case. Read reviews and opinions left by other users, specially on forums (If on a forum, see how many posts the user, that had left the review, have: this because, sometimes you can find a review on a forum but the user has only done that post, about the review, on the forum. This means that the user has subscribed to the forum just for writing the review: not a normal thing, specially if the review is a positive one. In this case, that user, can be someone that is working for the Forex Broker).
Moreover, we will suggest you to try contacting the Forex Broker (Before you open an account) through their customers support just to see how much time they need to answer to a request (And if they answer to your request; if you don’t know what to ask, just invent it or ask for a clarification about something).
Lastly, if you are still not sure about the reputation of the Broker, you can open an account but with a small deposit, and after few trades, you can try to do a withdrawal and see how it goes. But before opening an account, check the information of the society behind the Forex Broker too: as before, use Google. You can discover pretty interesting things about a Forex Broker by searching for the company that it’s behind the Broker.
Last advice: if the Broker will contact you directly, asking you to put more money on your account (So that you will be able to gain an extra bonus, or to have other “nice” features), that’s not a good sign. Just ask yourself why they want you, to put more money on your account… Yes, as you’ve rightly guessed they are interested (Too much) to your money and not to you, as a client. In this case, you should change Broker as soon as you can.