The Financial Services and Markets Authority (FSMA) of Belgium has issued a warning against five brokers which it suspects to be scams. The financial regulatory agency has received many complaints against these entities from Belgian residents and published an official list, so that traders worldwide are warned to stay away from these brokers.
Scams in the CFD trading market have become increasingly common, so always make sure to only trade with regulated, trustworthy brokers.
If you ever have any complaints about forex, cryptocurrency or binary options brokers, or have trouble getting your money back read our broker complaints section to see exactly what to do next.
Without further a due, this is the official list published by FSMA of the five scam brokers and the companies behind them:
- 365 Markets (Trustnet Ltd)
- CFDs100 (Trystem Limited)
- FXG Trade (Capital FXG Ltd / Nordic Pearl Ltd)
- HybridReserve (Singlebell LTD/ SingleBell OU)
- PBN Capital (Capital Tech Ltd / Pbox Ltd
Along with the warning, FSMA stated that “any company wishing to offer investment products must hold an authorization” and explained that the companies listed above do not comply to these rules. Moreover, the regulatory agency has been gathering complaints related to these brokers from Belgian residents, which seem to have been unlawfully offering their services.
Residents of Belgium and other countries should therefore always be wary of such scams that mask as online trading platforms.
3 Signs That a Broker is Probably a Scam
Please note that individually, these points do not prove a broker is a scam. If a broker shows all three signs listed below, then that broker is most likely to be a scam.
1: No license
The first thing to look for when considering a new broker is their license. If the broker is not licensed or regulated under any financial regulatory agency, this is a bad sign.
You can see whether a broker is regulated or not on their website. Usually, most brokers list their regulatory agency and license number under a special “regulation” tab on their website.
If a broker is regulated, they will always state this on their official website.
Take the example of the regulated broker IQ Option. You will see from the screenshot below that their regulation tab is immediately visible and what information they provide.
2: Vague website and no company information
Another quick tell that a broker might be a scam is if their website is especially vague. Always make sure that the company is providing you with all the necessary information like trading conditions, deposits required, clear terms and conditions and of course, the company information. If you cannot find any information about the company that owns and operates the broker, this is never a good sign. A vague website is usually one of the first red flags that something is not right.
3: Get rich-quick promises
The last thing to avoid is the most common indication that a broker is a scam. The minute you see a broker promising high returns in an impossibly short period of time, know this is most definitely a scam. There are many brokers out there promising traders that they will be rich in just 24 hours, when in reality this is impossible.
No broker can ever predict exact trading results. All trading entails some degree of risk and results depend on various factors such as market fluctuations, currency trends, individual software settings and trading skills.
In conclusion, all traders should take the FSMA warning into consideration, stay away from all the brokers listed above and always keep our warning signs in mind.