What is forex broker scams?
There are several main characteristics forex broker scams: the address of the trading website is different from the registered address of the company, the deposit account is a private account, there is no regulatory agency or a fake regulatory agency, etc. If investors can clearly distinguish these three points, they can Effectively distinguish foreign exchange black platforms and prevent foreign exchange fraud. Among them, the regulatory agency is the biggest weakness of foreign exchange black platforms. Forex black platforms are not supervised, or are supervised by some small countries. These supervisions have no benefits at all, so we must pay attention to and verify the supervision!
How to spot forex broker scams
Almost all companies and individuals that offer, promote or sell financial services or products in the UK have to be authorised by the Financial Conduct Authority (FCA).
Investing in an FCA authorised firm means that your money will be protected by the Financial Services Compensation Scheme (FSCS).
The FSCS protects investments of up to £85,000 if a firm goes bust or you received poor advice that caused you to lose money.
Unauthorised firms aren’t protected by the FSCS so it’s more difficult to recover your money if anything goes wrong with the firm.
It is a good idea to use the FCA register to check whether a forex broker is authorised by the FCA. If they’re not on the list, they could be a scam broker.
It’s also worth searching the FCA’s warning list of unauthorised firms to avoid too.
This isn’t an exhaustive list and the FCA regularly updates it with new companies to watch out for. And if you have any doubts about a forex broker you can contact the FCA to find out whether the company is legitimate and report any unauthorised firms. As mentioned previously, you also need to beware of cloned firms, where an authorised company’s details are being used by scammers.
What can I do if I have been scammed?
It’s important to act quickly if you think you’ve fallen for a forex scam.
You need to contact your bank as soon as possible if you have:
Made a payment using a debit or credit card.
Made a payment via bank transfer.
Given away personal information.
You should also report the scam to Action Fraud and the FCA so that they can investigate and try to recover your money if possible. This can also help other people avoid falling victim to the same scams.