Scam Trading Brokers can rip you off
Brokers are your gateway to the world of trading. If you are new, you should check new trading signup bonuses first. They allow you to make transactions with ease and convenience, but not all brokers are created equal. Some may engage in dishonest practices, called "scam trading tactics."
If you're new to trading, it can be hard to know how much authenticity you should place in certain broker reviews or testimonials—which is why our article on signs that a broker might be fraudulent will help prepare you for what's out there.
How to Spot a Scam Broker?
To ensure that you are searching for the right information, the best way to start is by simply looking at the broker's website. If it doesn't look like any other online broker's website, one or more of these red flags may be present:
• The company name isn't listed anywhere on the site.
• No mention of an upcoming promotion.
• It's unclear how the service works, or there are no ratings or testimonials that reveal how well they treat their customers.
• There are too many links that lead to other sites instead of to the company's own site.
These aren't necessarily bad things. It just means that if you're looking for a real broker discount packages (vs. a fake one), you'll have to seek it out. Just remember that if a company doesn't have its website on the number one search result for its name, it probably isn't legitimate.
If you're not sure whether to trust your broker, here's the next step: look over the company's background and see if there are any suspicious signs in their history. Does it sound like a startup that has only been in business for a short time? Has it been in that same industry for long enough to show consistency in customer service? If so, that's another indication of fraudulence.
How to Avoid Scam Brokers?
While there are some brokers that are legitimate, it's not always easy to spot their legitimacy. To help you avoid getting scammed, here are additional hints that can help you discern the difference between a scammed broker and a legitimate one.
1. Find out what the company actually does for a living
If your broker is sending your business to other third parties without your consent, it's called "spoofing." Here's how to spot it:
• It looks exactly like the original website or email from the actual company, but without an official "www" or "im" at the end of the site name (even though there isn't any).
• It's impossible to contact the broker because it's a "ghost" site, and there's no address or phone number to call.
2. Check the company's domain name and registration data
Is the company registered by a real person? Are the brokerage deals and discounts offered based on real offers? If so, its owner/administrator should be readily accessible online, through their website, or through social media channels such as Twitter and Facebook. There should also be a physical address where customers can go in person to interact with the owner of the business.
A fake company will often register with a website that is not owned by them, but instead by someone that they pay for this service.
3. Online reviews are vital to your decision
Online reviews are one of your best tools to help you determine whether or not a broker is good enough for you. A good broker with high ratings is more likely to be legitimate, while a poor rating is a red flag that something isn't right. It's important to remember that the top rating doesn't always mean it's legitimate.
Again, here are some signs that may indicate this type of activity:
• Reviews have negative language in them, even though the review is positive.
• The review talks about how great they are at redeeming offers.
• Reviewers have never actually used the broker or have no proof that they are who they are.
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4. Check the background of the company itself
• Visit the Better Business Bureau website to see if any complaints have been made against it.
• Check to see if there are any pending lawsuits against it.
• Find out what governing bodies has it registered with, and make sure whatever they say matches up with whatever is posted on their website or in their offer promotions