Fake Brokers
  • 8.09.2021

Steps to Take When Choosing a Broker

To avoid losing your money to a forex trading scam or a fake broker, it is important to follow the following best practices:

Sign up only with a regulated broker

Do research on the broker and verify all contact information

Beware of guaranteed returns or extravagant promises

Read the terms and agreements and ensure all information about fees is discussed and clarified

Start with only a small amount and see if your funds will be released

Test customer service to ensure they are knowledgeable and provide real information

Look for a choice of payment options, practice accounts, fees, spreads and commissions, and other resources

The first thing to look for when signing up with a broker is that the broker is well regulated and has high-tier licenses.

Although it is not unheard of that a forex trading scam may be run by a broker that holds a license, the majority of fake brokers either have no license at all or hold one from a third or fourth-tier regulator that provides little oversight.
It is also essential to work only with a broker that has a real website with verified contact information. Scam artists like to hide, so check and test that they have a real location and can be contacted directly.
Not only should you ensure that the broker has a secure website and a license, but check that it has thorough information and transparency about fees, commissions, spreads, and accounts.
If this information is not on the site, call customer service and get clear answers. A lack of transparency about these details is a red flag since many customers compare brokers based on these issues, and hiding them is usually a sign of a problem.
Another caveat is to refuse to believe a broker if they say returns are guaranteed. There are no guarantees with investments, especially high-risk trades like forex, CFDs, and crypto. A broker should not be aggressive and use cold calling or spam emails to try to drum up clients. They should also encourage their clients to show patience and not to expect outsized returns.
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