Common Broker Scam Complaints and What They Could Really Mean

Many disgruntled traders who lost money on their trades, take to writing negative reviews online to defame brokers. This may be perceived as a good way to vent frustration, but it chips away at the reputation of professional brokers. We fully agree that scams should be exposed and FX Trust Score takes steps to publish information on blacklisted brokers. However, what if common scam complaints are not really scams at all? Let’s take a look at some possible examples and try to break them down for clarity.

The Broker let me deposit, but wouldn’t let me withdrawn my funds.

• Many times, deposits are topped up with trading bonuses, which are not cash. In most Broker terms and conditions, it states that bonuses cannot be withdrawn and must be traded. So, if a trader is trying to withdraw an amount that includes this bonus, he will not be permitted to do so. Nothing prevents a trader from withdrawing the funds that are sitting in his cash balance.
• One also has to consider the withdrawal method the trader is trying to use. Was the initial deposit made by credit card and now the withdrawal was requested as a bank transfer? Again, in most cases, money must be returned in the exact same way it was received. If this is not possible, then it can be withdrawn via an alternative, verified payment method.
• Regulated brokers follow very strict Anti Money Laundering regulations and create policies in order to be as compliant as possible with all the relevant authorities. It is always best to read the payment terms and conditions or reach out to Client Support if you have any questions.

The Broker took all of my money.

• Regulated Brokers cannot just ‘take’ traders money. There are very strict regulations enforced by financial authorities and brokers are accountable to these authorities. It is always recommended that you trade with a licenced broker so that you can raise a complaint should any serious issues arise.

• If you accept trading bonuses as an incentive to making a deposit, you should be aware that bonuses may have an expiry date. If money seems to have ‘disappeared’ from your trading account balance, reach out to Client Support to confirm whether the missing amount was actually the bonus.
• Check the fees of the broker. If you have not traded for a while, the broker may have applied a dormant or inactivity fee. This is the standard practise of many international banks. 

• Trading is risky and every licenced broker advertises this fact throughout their website. Please bear this in mind. Whilst you can follow the markets or copy trade, it is still important to note that there are no strategies or tips that can guarantee you a profitable outcome. You will see disclaimers across regulated broker websites, such as this one from XM:
  
  “Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.18% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please consider our Risk Disclosure”.

This Broker is a scam – do not trade with them!

• Defaming a broker without reason shows bad character. However, if you have reason to believe that you have been scammed by a broker, it is helpful to include clear and concise details of the scam, as well as the broker’s name. By sharing your story, you can prevent others from falling into the same trap. If you have lost money on your trades and feel disgruntled, it is not recommended to take to different social media platforms to blow off steam, as that does not help you or anyone else.

The Broker is not answering my messages and has taken all of my money.

• Always check whether your Broker is licenced because it will be near to impossible to hold an unregulated broker accountable for any wrong doings, should an issue arise. FX Trust Score highly recommends investing with a regulated broker that adheres to strict financial regulation and has the means in place to protect your funds. This could include insurance, segregated accounts with top tier banks and so on.
  
  If the broker is not answering your messages, it is a huge red flag and you should consider closing your account. You can also escalate your issue by raising a complaint with the broker or reach out to the authority that licences the broker in your jurisdiction, who may have an ombudsman.

Every trade takes more than it gives

• This is a sweeping statement and a number of variables are at play. What asset was traded? Were there any trading fees applied, if so, how much? Did you close your position at the optimal time to make a profit? and so on.
  
  If a pattern of loss reoccurs and you feel there is something underhanded going on, then of course, bring it up with your broker so that they can look into your account activity. However, if it is because you made a wrong and untimely decision to close your trade, that would be your responsibility and something the Broker cannot be held accountable for.

It’s a huge manipulation – more than 75% of investors lose their money!

• This does not mean that the broker is controlling or manipulating who wins or loses trades. This statistic is dictated by actual reporting data. The markets are constantly being affected by social, political and economic events, and are unpredictable and uncontrolled. Even brokers themselves cannot ascertain how a specific asset will perform in the short or long term.

I cannot contact customer service at all – no one is answering.

• This is a huge red flag! One should not invest funds with a broker that does not provide standard support channels such as Live Chat, Email or Social Media Support (WhatsApp, Viber etc). When traders experience a problem, it is very important to know there is a reactive team there, ready to promptly provide support. We would highly recommend prioritising other brokers which have a dedicated live chat or support ticketing system.

Someone called me and asked me to invest funds.

• Calling traders is prohibited across many jurisdictions and traders should therefore be aware that anyone calling, could be a scammer.  Any trades should be performed by you, when you decide, with your funds and from within your account. Do not share your credentials with anyone and do not allow others access to your account or assist you using remote software such as PC Anywhere or TeamViewer. Many traders around the world have lost substantial funds by believing scammers, claiming to represent brokers or crypto exchanges.

I have not yet received my withdrawal and it has been processing for some time.

• In this case, it is recommended that you raise a ticket to client support and ask them if there is a specific reason why your withdrawal has not been processed. If there is an issue, they should be able to share it with you so that you can take the required action.
• Most brokers will not process a withdrawal if the client’s account has not been fully verified. Ensure you have taken steps to verify your account by providing any KYC documentation that may be pending on your account. KYC documents could include your Proof of ID, Proof of Residence, Source of Wealth or a Liveness Check for exampe.
• Speaking with Client Support is critical here, so that they can provide insights into why your withdrawal is delayed. If you are not given an answer within 1 week, it is time to file a complaint through the broker, which will escalate the matter to the legal and compliance team.

When I received my withdrawal, money was missing.

• This may be because the broker applied a ‘withdrawal fee’ when they processed your withdrawal. Payment service providers charge a fee for processing every single transaction. Many brokers absorb this cost, however, some brokers pass it on to their clients. Whether this is good or bad practice is a matter of opinion, but do check to see if a fee was applied in your case. If a fee was not applied, it is advisable to contact support and ask for clarification.

If you are planning to start investing, it is very important to consider these tips:

• Check that your broker holds a valid licence by a recognised financial authority.
• Check what others are saying about the 1-3 brokers you have in mind.
• Get clarification on your questions ahead of time by reaching out to Client Support.
• Open a Demo account so you can practice without the pressure of losing money or making a mistake.
• Familiarise yourself with the trading platform (MT4, MT5 or proprietary).
• Most brokers offer extensive educational resources – dive in to better understand forex terminology, like Leverage and Margin as well as other important tools and info. Knowledge will give you the ability to make better decisions.
• Follow market news and financial news so that you promptly learn about any political, economic or business event which make cause market movement and influence your trades.
• If you experience an issue which you feel may be a scam, try to resolve it directly with the broker. If your complaint is not being heard or actioned, then you may consider reaching out to the authority under which that broker is licenced or report the forex broker to us.
• Please understand that CFD Trading is risky and there is a high risk of losing your funds. You should decide on the amount you are willing to invest and keep that limit in place. This will help you avoid losing more money than you can afford. If you feel you have overstepped your personal budegt and wish to terminate trading, you can also contact your broker and request that your account be closed.