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Warning signs of a forex scam broker, and what to do

Fraudulent brokers and ‘signal’ schemes follow familiar patterns. Learning them takes minutes and can save you the whole deposit.

Red flags

  • Guaranteed or ‘risk-free’ returns. No regulated broker can promise profit.
  • Unsolicited contact. A stranger or ‘account manager’ contacts you through social media, a dating app or a messaging app and steers you to a trading site.
  • Pressure to move to WhatsApp or Telegram and to deposit quickly, or to top up to unlock a bonus or avoid a ‘loss’.
  • Fake or missing regulation. No licence number, one that does not match the register, or a clone of a real firm’s website with a slightly different domain.
  • Withdrawal problems. You are asked to pay ‘tax’, ‘unlocking’ or ‘verification’ fees before you can withdraw.
  • Crypto-only or third-party payments to accounts that do not match the broker’s name.
  • Screenshots of profits used as proof, or a platform where profits appear on screen but cannot be withdrawn.

How to check in a few minutes

  1. Search the exact company name and licence number on the regulator’s own register.
  2. Check the regulator’s warning list and IOSCO’s I-SCAN portal.
  3. Compare the website address with the one on the register.
  4. Search the broker’s name with ‘scam’ or ‘withdrawal’, and treat glowing reviews with suspicion.
  5. Ask which legal entity will hold your account, and get it in writing.

If you have already paid

  • Stop sending money, including any ‘fee’ to release funds.
  • Keep screenshots, chat logs, payment receipts and wallet addresses.
  • Contact your bank or card issuer immediately. Time limits for disputes are short.
  • Report it to your national financial regulator and to the police or fraud reporting service in your country.
  • Be wary of ‘recovery’ services that contact you and ask for an upfront fee. They are a second scam.

Key takeaway

If it seems to be guaranteed, urgent or hard to withdraw, stop. A regulator’s register takes a minute to check.

General information for education only, not financial advice. Trading forex and CFDs carries a high risk of loss. Read the disclaimer.

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