Fake Brokers

As a response to economic uncertainty, to build up a nest egg for retirement or college, or to find a way to grow savings, more people are investing. It is estimated that up to half of all Americans have some type of investment, usually indirectly through a 401(k) or IRA provided by their employer. In addition, more people are exploring the possibilities provided by online trading.
As a result, we see many advertisements online for forex, crypto and stock trading. Unfortunately, a large number of forex trading scams and crypto scams have developed in recent years. The SEC announced a significant uptick in the number of trading and broker complaints since 2020. The more people fall prey to these scams, the more fake brokers are encouraged to launch additional fraudulent schemes.
Fake brokers employ different tactics but there are some basic patterns that are recognizable in crypto and forex trading scams. Most but not all of these frauds involve unregulated brokers or those with low-tier licenses. Others have no real website and try to lure people in on social media with fake guaranteed high returns. If you have fallen prey to fake brokers, it is important to file a complaint right away.
Broker Complaint Registry is the right place to turn when you need guidance filing a complaint about a fake broker. We consult with clients and refer them to experts who can pursue their case in detail and work to investigate the broker or scam, and in many cases, succeed in fund recovery. Talk to us today, and we can provide guidance on how to deal with the claim.

The Problem of Broker Scams

The number of fake brokers, whether they operate forex trading scams, crypto scams, or deal with stocks or commodities is increasing. Riskier assets such as forex, crypto, and CFDs are preferred by fraudulent brokers because they provide an excuse for not giving clients their money back. With risky assets, it is easy to claim that the trades lost money.
Of course, if the client is given any transparency about what their money is being used to trade, they can check whether the asset increased or decreased in value. However. The sham brokers may use false facts to bolster their case.
They could attribute the loss to some made-up rule about trading, or they could seize potential gains in the form of high fees. In many cases, fake brokers disappear entirely and lock the client out of their account. If they maintain communication, they often attribute the issue of a locked account to a technical problem they never seem to solve or some obscure rule about their right to close accounts for any reason. Since many brokers work under false identities they can disappear without a trace.

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.

What to Do About a Scam Broker

Often, people don’t manage to find out their broker is fake until the broker already has their money and won’t release funds. This leaves the broker in control of the situation and there is little a client can do without assistance.
They may give an excuse for not releasing funds and pressure clients to send more money for additional trades. However, do not believe these excuses and seek assistance or file a complaint if the broker refuses to release funds.
There is a difference between a broker dispute and a scam broker complaint. A dispute is a disagreement over service with a legitimate broker. A scam broker complaint is often one-sided because the broker has disappeared and will not communicate. In either case, you will need assistance to ensure your complaint will impress regulators and authorities. Broker Complaint Registry also creates intelligence reports that can bolster your claim.

Have You Been Cheated by a Fake Broker? Broker Complaint Registry Will Help

Contact Broker Complaint Registry experts if you need assistance a fake broker complaint. We deal with a variety of issues, including broker scams, forex trading scams, and crypto complaints. Our team will refer you to experts who have vast experience dealing with regulators, banks, and law enforcement. We will provide advice and give you valuable guidance to help you resolve the issue.