Broker Fraud — Look out for these signs!! — Investment Bloom
There are hundreds of trading brokerage sites offering trading platforms and services. Unfortunately, not all of them are legitimate. You should beware of investment frauds packed convincingly through these sites. Choosing a safe and profitable brokerage site could be challenging and time-consuming if you don’t know where to start. Make sure you first visit Broker Complaint Alert for a directory of scam Brokers before you proceed.
Check our list below as your guide when researching trading brokers and identify the scam broker in one minute.
Unreal Profit Promises
When an infamous trading site promises you massive profits over their services, it’s a red flag. All reputable brokerage services never set a particular percentage to be guaranteed as your profit because they simply can’t. No one can 100% predict stocks and currency trading markets. Successful traders can secure profitable trades, ensuring the exact percentage/rate is absolutely an exaggerating claim. When you notice such unreal profit offers, you can skip the site and look for another one.
Lack of Live Trading Data
It’s effortless to spot a trading investment scam from the performance. The scam broker would typically use the historical trading data instead of the live ones. This deception is an obvious sign of an illegitimate trading platform and absolutely an alert. Avoid making deposits when you figure this kind of trading performance. If you’ve noticed these indicators, skip the platform and make a report if you’d like to.
Limited to No Information about The Operation
You should beware of brokerage sites that have very minimal to no information about their operations. They’re absent in forum discussions or trading review sites, and you hardly find evidence about how they perform trading. There’s no validated success story about the broker delivering profits to the clients. Don’t proceed with your curiosity further, as they’re almost certainly an illegitimate trading site. Even a new-legit trading site would have better exposure that you can easily verify. If you can ascertain nothing about a trading site, they could have been a stockbroker fraud, and you can avoid them.
Anonymous or Unverified Brokers
Despite the platform, you can check the status from the name of the brokers. Successful or professional brokers in legit platforms confidently display their profile and promote their portfolio with no hesitation. You can easily verify the profile or real brokers through the trading platforms, communities, forums, or review sites.
These brokerage fraud sites typically avoid listing names of traders, or they merely fake ones. If you didn’t find any broker’s name that you can verify further, they could have been another scam broker you should avoid.
Forcefully Asking for Large Deposit
It would be a red flag that the broker asks you for a large deposit upfront without disclosing necessary information about the trading mechanism. In some cases, the broker even asks clients for more money to make a withdrawal that they’d never receive. They may also lure you with binding bonuses, which are a dirty scheme that locks your balance. Don’t get it wrong; their customer services could be very responsive when you start communication with them. The more they convince and lure you, the more reasons you should go from there.
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Unreal Winning or Losing Ratio
There are many trading brokerage sites with a self-claimed spectacular winning ratio. If you see a ratio of 9:1 of winning and losing ratio while you can’t verify anything about the platform and the promoted brokers, that’s another red flag for you. Don’t proceed with an account any further if you see no legit proofs upon their claims. The winning ratio usually appears as the portfolio, and most brokers would be cautious in promoting or explaining it to their potential and actual clients. Something too good to be true is subject to your cautions.
Bad Reviews
You should know that HYIP fraud brokers don’t always use fake trading platforms. There’s a broad spectrum of trading scams, and many of them are done smoothly inside the platform with real trading performance. For example, they trigger stop losses and prevent you from hitting the tick. Some of them even continuously take small sums of profits instead of making you bankrupt at once. You can now refer to the reviews on the platform to whether the brokers trade on your behalf responsibly and charge you with fair commissions and fees.
Promoting Secret Formula
First of all, there’s no such secret formula in the trading market. It requires a strong comprehension of how the market works and excellent skills and extensive experience to capture profitable trading opportunities. There’s no instant way to be a good trader. Even beginner traders may take days to weeks taking courses and using the demo accounts. If someone is luring you with that secret trading formula without any verified information, they must be a sign of broker fraud.
Unregulated Trading Company
For the safest trading investment, you should go to regulated trading companies only. Of course, the government may regulate a trading platform in some regions but not in other countries. However, countries hardly regulate the brokerage site anywhere, and there are 50:50 chances that they’re scams. Trading with an unregulated brokerage platform brings many disadvantages, especially when there are disputes to settle, even if you have an investment lawyer on your side. We highly suggest to play safe and move to regulated trading companies.
Under Sanctions or Prohibition
For a quick look at whether the stock market is a scam or not, you can navigate to the regulatory bodies’ sites in your country(and other countries if necessary). Check if the broker is under sanction or prohibition of those regulatory bodies. These institutions usually list down all trading scams and the ones with indications. If the broker appears in the list, you wouldn’t have any reason to research it further. However, you’d need to consider more factors mentioned above, even if the broker doesn’t appear on the list. Also, beware of the fake legit broker sites that scammers make to trick people.
The truth is that as technology advances, so do these online brokerage sites. Once you suspect any broker fraud, always trust your gut. If you are a victim of scam broker sites, you can recover any investment you have lost. Visit www.atriumforensics to learn about the recovery services they offer.
Originally published at https://investmentbloom.com on February 9, 2021.
