In this guide
- 1. How to Avoid Forex Broker Scams: Scam Broker List 2024
- 2. What is a forex broker scam?
- 3. What types of forex scams are there?
- 4. How to avoid forex broker scams
- 5. Here’s a list of scam forex brokers to avoid
- 6. Who are the main international forex broker regulators?
- 7. What to do if you are scammed?
- 8. Are all forex brokers scams?
- 9. Recommended regulated brokers
How to Avoid Forex Broker Scams: Scam Broker List 2024
Invezz is an independent platform with the goal of helping users achieve financial freedom. In order to fund our work, we partner with advertisers who may pay to be displayed in certain positions on certain pages, or may compensate us for referring users to their services. While our reviews and assessments of each product are independent and unbiased, the order in which brands are presented and the placement of offers may be impacted and some of the links on this page may be affiliate links from which we earn a commission. The order in which products and services appear on Invezz does not represent an endorsement from us, and please be aware that there may be other platforms available to you than the products and services that appear on our website. Read more about how we make money >
Over $6 trillion a day is traded in the forex market. With big money on the line, scammers have started to prey on unsuspecting traders. This page explains everything you need to know about how to avoid forex broker scams.
What is a forex broker scam?
Copy link to sectionIt’s a sophisticated ploy to defraud and steal money by creating a fake forex brokerage. These types of scams can work in two ways. The first method criminals use is to copy an existing forex broker and make traders believe they are the real deal. The second way is by creating a new brokerage platform with the sole intention of ripping off customers.
What types of forex scams are there?
Copy link to sectionScammers have many different ways to defraud forex traders. From fake brokerages to pyramid schemes, the list of scamming techniques is long. Below, we’ve explained five of the most common types of forex scams.
Forex broker scams
Copy link to sectionForex brokers are platforms that allow you to trade the currency market. Most are legitimate businesses operating with licences from regulatory bodies.
Forex broker scams are when criminals pretend to be legitimate and entice traders to deposit money which they then steal. Scammers can either set up an entirely new brokerage platform using fake licence numbers, websites, and software or imitate an existing broker using a fake website.
Forex signal scams
Copy link to sectionForex signals are when companies offer tips on when to buy and sell currencies. They usually charge a monthly subscription fee for their service. Forex signal providers often do not have the knowledge, experience, or skills to make profits consistently. Scam signal services promise high returns but quickly disappear with your money.
Forex robot scams
Copy link to sectionForex robots are software programs that automatically buy and sell currencies. They use algorithms to determine the best time to trade and results can be verified using a third party. Scammers make fake robots and sell them to unsuspecting traders. Usually, these bots are based on unprofitable strategies and result in you losing money.
Forex Ponzi scheme
Copy link to sectionForex Ponzi schemes are when fraudsters set up a fake fund and get people to invest in it. Usually, they will ask for a small initial investment and pay you back very quickly with profits to make you believe they are legitimate. They will then ask you to deposit more money and even encourage you to get your friends and family to invest. Once they have enough money paid into the scam, they will disappear.
Forex Instagram scams
Copy link to sectionInstagram forex traders use flashy tactics to trick young users into handing over money to copy their trades. Instagram forex scammers post photos of themselves with luxury cars and wads of cash in exotic locations. These cars are usually rented, the money fake, and the holidays paid for by scams. Instagram is littered with forex scammers and it’s best to stay away.
How to avoid forex broker scams
Copy link to sectionAvoiding scams is easy to accomplish as long as you are diligent and take the time to research. While imitation brokers can be difficult to initially spot, using a few techniques and checking specific information can save you from falling prey to scammers. Here’s a list of ways you can avoid forex broker scams:
1. Choose a regulated broker
Copy link to sectionIf a broker isn’t regulated, there’s a high chance it is a scam. Some scam brokers use fake regulatory information such as licence numbers. You can easily check if a regulation number is legitimate by visiting the regulator’s website. Every region has its own regulatory body, such as the FCA in the UK.
You should also use a broker that is regulated by a well-renowned authority and stay away from those with licences where laws are weak. For example, the UK and Europe have some of the strictest rules regarding forex brokers, so it’s best to choose a broker licenced there. Many scam brokers operate out of St. Vincent & the Grenadines and other offshore locations.
Below on this page, our experts have ranked the best regulatory authorities.
2. Check the broker’s contact and address information
Copy link to sectionReal brokers have their contact and addresses clearly stated on their websites. Scammers don’t want you to know their location, so they will use false details. It’s easy to check whether an address is real by searching for it online. You can also use things like Google Maps and street view. Stay away from brokers who use P.O. boxes or fake office buildings.
3. Use online reviews to check for scams
Copy link to sectionIf you have found a broker online that appears to check out, but you’re still not sure, then reading online reviews is a top way to find out more information. With the retail forex market being so popular, there are many review websites and forums where you can learn from other traders about their experiences with specific brokers.
Some scammers take their devious actions to higher levels and create fake forum accounts to post positive reviews. Luckily these are usually easy to spot as they will be from newly created accounts that have not posted before. They may all be within a short period too. On most forex forums, it is easy to discover whether a broker is a scam.
4. Avoid brokers with unrealistic marketing
Copy link to sectionNot even the world’s greatest trader can guarantee forex success, so if you find a broker that does, it’s clearly a scam and should be avoided. Other common marketing material scam forex brokers use are claims that you can make ‘big profits’, ‘get rich quick, and similar unrealistic goals.
Unrealistic marketing doesn’t just apply to forex brokers; you should be wary of other trading services using such tactics. Instagram, in recent years, has become a hotbed for forex trading scams, where fraudsters post photos of their lavish lifestyle to persuade you to join their service and replicate their results.
5. Make sure the broker accepts different payment methods
Copy link to sectionScam forex brokers usually only let you deposit using several payment methods. Legitimate brokers let you deposit funds using your bank card or account and various other options like PayPal, Stripe, and Payoneer among others. Be wary if a broker insists on deposits using a payment provider you have not heard of or only accepts cryptocurrency.
6. Be cautious of big bonuses
Copy link to sectionIt is common for a broker to offer bonuses to new users. However, platforms continuously offering large signup bonuses should be treated cautiously. They could be legitimate, although you should consider how they can operate by offering large amounts of money to new traders for free. Sometimes scammers offer a bonus to gain your trust before stopping you from withdrawing
7. Avoid brokers that offer guaranteed profits from forex signals and robots
Copy link to sectionAny broker that guarantees profits if you use their signals or trading robot is surely a scam and should be avoided. These types of brokers generally operate in the cryptocurrency industry or offer binary options, although some offer forex too. It is impossible to guarantee profits from forex trading, so make sure you proceed cautiously with any broker claiming they can.
8. Verify that any awards are legitimate
Copy link to sectionLots of well known financial companies give out awards for specific services relating to forex brokers. Genuine forex brokers have these awards on their websites to show users how trusted they are. However, scam forex brokers claim they also received awards and use fake images to entice traders. If an award is legitimate, you can easily check using a quick google search.
Here’s a list of scam forex brokers to avoid
Copy link to sectionThere are thousands of scam forex brokers across the globe and the authorities have shut many down. Some are complete scams operating with no licences and stealing money. Others operate out of offshore locations and you should be cautious with them. Here’s a selection of some confirmed forex broker scams.
| Broker | Reason | Regulator warning |
|---|---|---|
| Blackstone 500 | No licence | FCA |
| RoyalGTX | No licence | FCA |
| Fxtradeoptions | No licence | FCA |
| Swissquotes.de | Clone firm | FCA |
| Midasworldwide | No licence | FCA |
| Capitalinvest365 | No licence | FCA |
| StarkMarkets | No licence | FCA |
| Exclusive Forex Trading | No licence | FCA |
| Libra Markets | No licence | FCA |
| Smart FX option | No licence | FCA |
| 4xPremium | Clone firm | FCA |
| Forexitrade | No licence | FCA |
| GFX Royal | No licence | FCA |
| Global FX Team | No licence | FCA |
| Fxfcapital | No licence | FCA |
Who are the main international forex broker regulators?
Copy link to sectionIf a forex broker wants to operate legitimately, they need to be regulated by a financial authority. Regulators in different jurisdictions have different rules and some are stronger than others.
Authorities from established tier-1 locations are always better than those from emerging or lower-tier jurisdictions. Here’s a list of the main forex broker regulators ranked by our experts.
| Regulator | Jurisdiction | Rating |
|---|---|---|
| FCA | United Kingdom | Excellent |
| CySEC | Cyprus | Good |
| ASIC | Australia | Good |
| FMA | New Zealand | Good |
| DFSA | Dubai | Ok |
| FINMA | Switzerland | Ok |
| SVGFSA | St. Vincent | Poor |
What to do if you are scammed?
Copy link to sectionIf you’re unfortunate to fall prey to a forex trading scam, then you can do a few things. It may not be possible to retrieve your lost money, although you have a better chance if you follow the tips below.
- Contact your bank. You should contact your bank and report the scam so that they can stop any future transactions. Sometimes, the bank may even help you retrieve your money or provide you with legal assistance.
- Cancel your card. If you paid money to a scammer using a bank card, you should cancel it immediately. This way, you’ll be able to stop the card from being used again for any fraudulent activity.
- Report the scam. Get in touch with your regulatory authority and inform them about the scam. Explained what happened so they can investigate the company or put it on a blacklist.
Are all forex brokers scams?
Copy link to sectionNo, not at all. Most brokers are legitimate businesses operating in well-regulated jurisdictions. The popularity of retail forex trading has paved the way for many new platforms to break onto the scene, all competing for your business.
Unfortunately, this has led to a few scammers entering the space. To ensure you don’t fall prey to fraudsters, follow the advice above and read online reviews to find the best forex broker platforms.
Recommended regulated brokers
Copy link to sectionThere are plenty of regulated forex brokers available and below, you can find a selection you can trust recommended by our experts. Click on any of the links below to register an account and start trading with a regulated forex broker in just a few minutes.
We found 3 forex brokers for users based in
CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
eToro offers real assets only, no CFD products. Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Invezz.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD.
More of the best forex rankings
Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >
