The forex market is increasingly popular in India. It is a vast global financial market, with over $5 trillion traded daily. We all know that online investments are pretty risky, which is especially true in the forex market. The forex trading market is a zero-sum game in which one person experiences profits while another suffers losses.
An abundance of online forex scams are initiated by scammers who get their confidence from the internet’s anonymity. Identifying forex scam brokers from legitimate forex brokers’ activity is imperative to protect users from financial ruin. So, the next question is how to identify forex scam brokers. So in this article, I am here to share how to identify forex scam brokers.
How to Spot Forex Scam Brokers To Avoid Losing Money
What is a Forex Scam Broker?
Forex scams are when criminals trick people into investing in fraudulent forex currency schemes. It is a collective term referring to any scheme that intends to defraud traders through deception, convincing investors of high profits by trading on the forex market.
For example, people may visit a beautifully designed website. An investor may see catchy promises of high returns and instant execution. As a result, they sign up for those websites and make a deposit. Then, the scammers will disappear after they have received payment from investors. A user deposits their money without verifying the website. As a result, users may lose money.
Below is the list of telltale signs to identify the forex scam brokers and avoid getting caught out.
Investing always comes with some level of risk. Risk is not only in forex industries. And it may be any other industry too. So, any forex company promising risk-free investment opportunities will likely be a scam. Risk-free investing is a clear sign of a scam in the forex market because the trader’s success does not depend on the forex broker.
In forex trading, the key role is played by the strategy of the forex traders. Before investing or trading, traders should gain enough knowledge about the forex market. If any forex brokers said, there is no risk in investing while trading, it is forex scam brokers.
Exaggerated Claims of High Returns
Suppose any forex broker promises that traders will claim high returns on modest investments. In that case, it is a sure sign that the forex broker is a scam because no legitimate broker can guarantee massive profit to the trader. The success of the trader’s investment is highly dependent on a volatile forex market. Forex traders may receive high profits or losses depending on the market.
But, a forex broker company that purports consistently massive returns is giving traders false claims because it is not feasible in the forex market. Moreover, according to the statistics, beginner traders to professional traders can claim 11-25 percent money only in the forex market.
Unregulated Forex Broker
Any forex broker company is regulated, authorized, and licensed by entities like FCA – UK, CySEC – Cyprus, FSCA – South Africa, ASIC – Australia, FSA- Seychelles, and more, then it is a legitimate forex broker. If it is not regulated or licensed, then it is a scammer. Traders can find information about regulators on the forex broker’s website or check it on the regulator’s website.
In India, a forex broker company should be locally regulated by the financial institutions of SEBI (The Securities and Exchange Board of India) and RBI (Reserve Bank of India). In the United Kingdom, it should be authorized and regulated by the Financial Conduct Authority (FCA) firm, in Cyprus – Cyprus Securities & Exchange Commission (CySEC), in South Africa – Financial Sector Conduct Authority (FSCA), and in Seychelles – Financial Services Authority (FSA).
Some of the forex broker companies have been regulated and authorized by all the above firms, which is the most trusted and safe platform in the forex industry. Some examples of regulated forex brokers are Exness, XM, FXCM, and more. Some unregulated forex brokers are Vestrado, Alfatrade, AXEForex, and more.
How to Identify Forex Scam Brokers – Scammer Online
Social Media Adverts
Many forex scammers are using social media to advertise fraudulent investing opportunities. Scammers advertise forex videos and images of luxury items to trick people into investing. They don’t talk about the downstairs of forex trading and focus only on the benefits of forex trading.
Some forex scam brokers work with unlicensed brokerages and end up defrauding investors. According to statistics, we have found that over 50 percent of forex scams start on Facebook and Instagram. Traders don’t blindly trust any advice on social media, which makes you extremely risky in forex trading.
Based on ratings also, traders can trade on forex broker sites. But, several forex broker websites are on blocked. They show fake ratings on their site. But, if we search on third-party sites, the website’s ratings will be low – it is a scammer website. So, forex traders should not trade based on ratings.
How to Report a Forex Scam Brokers
If traders believe they are a victim of forex scam brokers, then the first step is to contact their local regulator and make a complaint. In India, the Securities and Exchange Board of India (SEBI) has set up a system called the SEBI Complaints Redress System (SCORES). Indian forex traders can contact the SCORES and complain about the scammers.
How to Check Unregulated Forex Scam Brokers
A regulated forex broker will provide accurate certification, authority, and license numbers on their website, or traders can get their info from the forex directories. Unregulated forex brokers don’t have that information on their websites or in forex directories. An unregulated forex broker is called a forex scam broker.
It is often hard to contact them whenever there is a need for an inquiry. So, traders must try to reach them first before registering and also analyze whether it is authorized, licensed, & regulated are not. A regulated broker offers a seamless way of contacting them through phone calls, email, and live chats. Below are some of the regulations in the world.
- Cyprus Securities & Exchange Commission (CySEC) – Cyprus
- Australian Securities and Investments Commission (ASIC) – Australia
- Financial Conduct Authority (FCA) – UK
- Financial Sector Conduct Authority (FSCA) – South Africa
- Financial Services Authority (FSA) – Seychelles
Forex scam brokers – scammer list
Below is the list of some Forex scammer list.
|S.NO||Forex scammer list||Rating||Regulations|
|4.||Future FXM||1.09||No regulatory|
Forex Scam Brokers – Frequently Asked Questions
#1. Is a forex broker legit?
Yes, forex broker legit business and investment model. However, some forex brokers are not licensed called forex scam brokers.
#2. How do I check if a broker is regulated?
The easiest way to check if a forex broker is regulated is to look for it at the bottom of the website.
#3. Is the forex broker offering profits or rewards for opening an account?
Yes, forex scam brokers often make claims such as referring bonuses, signup bonuses, and more.
Conclusion – How To Know If A Forex Broker Is Legit
Hopefully, you got a clear overview of the forex scam brokers from the above article. And also discussed unregulated fake forex scam brokers, some fake trading website companies, and how to report forex scam brokers.
To find whether a forex broker is legit or not, the forex broker should be authorized, regulated, and licensed by some of the firms in the world, like CySEC-Cyprus, FCA-UK, ASIC-Australia, and more entities worldwide. So, look at the above article to find the forex scam brokers.