How Exactly Does Broker Fraud Work?
While trading and investing may be great ways to earn extra money online, they come at an incredible risk. Made even riskier by the extreme volatility in prices and massive amounts of leverage.
But choosing the right broker to use is the first step to even trying to earn money on the market.
All About Broker Scams – In Simple Terms
Broker scams are running rampant on the internet, with people getting more connected via the internet today than ever. Scam brokers take advantage of the less knowledgeable newbie traders trying to find ways to earn money on the markets quickly.
These scam brokers typically impersonate a legitimate website or broker. They are even copying their licenses to attract users into depositing money into their platform. These scammers also entice people with their massive bonus deposits and the promise of huge gains over a short period of time.
But not all broker frauds impersonate a legitimate website; some scammers try to make a neatly organized website from scratch and edit in fake licenses to convince people that their platform is honest and is regulated.
These brokers are made to make money out of newbie traders and investors.
How Exactly Do Brokers Scam Work?
These broker scams start with their website and licenses. Scammers create fraudulent websites with fake licenses plastered on their front page to let people know they are legit.
Once people sign up with their emails, they would get bombarded with messages of huge bonuses if they deposit a large sum of money, receive passive income by inviting other people to the platform, or promises of massive gains using their automated trading software.
Getting your funds out is quite a problem once people get roped into depositing to the platform. Once users try to get their money out, they would then be met with withdrawal issues because they violated some terms and conditions or some shady agreement in the contract that they have not yet achieved that will allow users to withdraw.
How to Protect Yourself From Scam Brokers?
With these broker frauds getting harder and harder to discern from legitimate ones, here are some tips to protect yourself from these scammers.
- Check genuine trader reviews.
- New traders and investors should always do research before investing their hard-earned money into any platform, and what better way to do this is by hearing what other people say about the broker.
- Users can easily find trader reviews online, and users can even see ratings to determine if the broker is truly good or not.
- Check trading license
- Trading licenses are different for brokers registered in various countries around the world. And with scam brokers copying legitimate licenses and pasting them onto their platform, it can be challenging to determine which broker is registered.
- And this is why regulatory bodies worldwide encourage people to research a broker’s information and license on their website. Traders can research from the BaFin database, the CySec database, and many more.
- Check scam warnings from financial regulators.
- Perhaps the best sign to avoid a broker is by following warnings from financial regulators worldwide. Traders can research if there are current warnings about their platform. Financial regulators do all the hard work for people and do extensive research to help warn users from using these broker scams.
If you have ever fallen victim to broker fraud, do not worry, as our team of experts here at Global Fraud Protection has found a way to get your hard-earned money back.
Do not feel bad because many more people out there have also been scammed that we have helped, and we can help you with the chargeback process too!
If you have any negative experience with other broker scams, report it to our free consultation team, as your report will help us disrupt scammers that are spreading on the internet. And your report will also prevent other people from falling victim to scam brokers. Do not let the scammers go free!
Think twice before investing your hard-earned money because scams can happen to anyone.
If you want to know more about different trading and investing scams and how to avoid them, visit Global Fraud Protection to learn more.