Fraud in trading is a very common phenomenon. Even experienced traders sometimes fall into traps skillfully set by unscrupulous brokers.
Modern companies imitate “decent activity” so plausibly that they inspire confidence even among those who ate more than one dog when choosing a broker. Not to mention novice traders. For this, marketing gadgets, NLP tricks, conscious online reputation management, etc. are actively used.
Before replenishing a broker's account, check the company at least according to elementary criteria:
- how long the company has been on the market - long-known, large brokers are preferred, and companies that exist for a very short time are better to bypass, even when “tasty” conditions are offered;
- where the company is registered - if it is an offshore zone (Cyprus, Seychelles, etc.), you should immediately think about possible fraud;
- whether the company is included in the "black lists" of Forex and binary options brokers;
- what are the trading conditions and the amount of commissions - perhaps the broker works honestly, but it’s completely unprofitable for the trader;
- what payment systems it works with - it should be alarming that it is not possible to replenish an account from a bank card or that the commission is too high;
- what they write about the company on the Internet - if there are negative reviews, it is better to look for another broker, even if bad reviews are balanced by positive ones, most likely this is just artificial reputation management.
How to work with any broker: important points
- Top up the brokerage account only with Visa and Mastercard bank cards, using a 16-digit number when making a payment.
- Do not send money to the details of individuals.
- Refuse to use electronic payment systems.
- If necessary, discuss in writing the terms of investment, deposit and withdrawal of funds and save correspondence.
- Refuse any additional payments and commissions from above for speeding up the processing of an application for withdrawal of funds.
- Before agreeing to bonuses (often offered when replenishing a deposit), carefully study the terms of use of these bonuses.
- When submitting an application for withdrawal of funds, in no case open new transactions, otherwise the application may be canceled automatically.
Following these elementary precautions will help the trader to protect himself from deceit and disappointment. In addition, in case of problems with the return of money from the broker, it will be easier to collect an evidence base.
Why does the broker not withdraw money?
Is it always the broker's dishonesty? Some brokers initially set conditions that are difficult to fulfill. How decent and permissible it is is up to the trader to decide. But carefully read the Agreement Policy before ticking the “Accept” box is definitely worth it.
So, what can cause a conditionally justified refusal to withdraw funds.
Trader's account is not verified
Verification is a standard procedure that is necessary to confirm the identity of a trader and exclude money laundering situations. Usually, to pass verification, it is enough to send a photo or scans of a passport, bank card, utility bill. After passing the verification, honest brokers allow you to withdraw funds.
But there is also the other side of the coin - when verification, in principle, cannot be passed. And this becomes a formal reason for refusing to withdraw funds, which initially no one was going to give to the trader. In such cases, the broker asks for more and more documents, makes claims, and as a result, it is not possible to return the money from the broker .
Brokerage bonus not worked out
Where is free cheese? A rhetorical question… Often the bonus needs to be worked out through large volumes, which is quite difficult to do. In addition, even if the bonus has been worked out, it is also not possible to prove the fact of working out in every case.
It has already been written above that all brokerage bonuses must first be carefully studied and only then taken or refused. And if there are difficulties with collecting evidence, you can seek professional help.
The withdrawal amount does not exceed the amount that was entered
It is recommended to indicate in the application for the withdrawal of funds the amount that was entered (or a little more, adding a little of the traded profit). When applying, you must enter all the data correctly.
There are cases when the withdrawal conditions change “on the go” without the knowledge of the trader or are generally impossible to fulfill. Legal nuances that must be observed are indicated in the user agreement. If something goes wrong due to dishonest conditions, you should immediately consult a lawyer who knows in practice how to withdraw money from a broker.
When it comes to outright fraud?
Large amount required
This "sin" even brokers with a good reputation. It can be easier for a company to receive a single negative review than to pay a trader a large amount. In such cases, the support service may not respond to requests at all and not give any feedback.
Without explanation or reason
Simply because the company is a scam. Moreover, the application can be approved, queued for withdrawal, and even executed! Only now the money on the account of the specified bank card will not appear. Sometimes the moment of recognition of the fact of fraud is delayed by various lucrative offers and persuasion to leave funds in a brokerage account. Whether the trader agrees or not, he will not see the money.
What to do if your account with a broker “suddenly” resets to zero or you were refused a withdrawal of funds from your account?
You have the only option to resolve the situation in your favor - to use the chargeback procedure.
Chargeback - return of funds to the card. The procedure is popular abroad and is guaranteed by Visa and Mastercard systems. In Russia, chargeback is rarely carried out in practice, which is due to the low awareness of citizens about its implementation.
What is the essence of the procedure? At the request of the client, the bank protests the transaction and forcibly returns funds to the client's account. This is possible if the client has presented grounds that determine the transaction as erroneous, unauthorized or fraudulent.
It is the chargeback that is relevant if the broker is a scammer, and the trader does not know how to return the money.
How it works?
An application for a chargeback is submitted to the issuing bank that issued the plastic card (the same one used to replenish the deposit with the broker). The bank is obliged to accept and consider the application for a disputed transaction, since it automatically agrees to the terms of the Visa and Mastercard systems (since it issues cards of either or both of these systems).
It is important to understand here:
- funds are returned to the client of the bank from the account of the service provider, and not from the account of the bank itself;
- it is the service provider (in this case, the broker) who must prove his case.
The statement states:
- information about the identity of the trader, his card accounts;
- payments that need to be canceled - information is taken from a bank statement, accuracy to the penny is important;
- the circumstances under which the fraudulent transactions took place;
- grounds for a chargeback (indicating the code, it is described below);
- any additional information that will become evidence of fraud on the part of the broker and help make a decision in favor of the bank card holder;
- summary - what exactly the bank should do, it is stated that there are no claims against the bank itself.
All grounds for a chargeback are specified in the Rules of the Visa and Mastercard systems. Each of the bases is assigned a specific code (Reason code). It is very important to enter this code correctly.
What codes are used most often
- payment was made, but the seller did not provide the service or did not provide it in full: Reason code 30 - for Visa, 4855 - for Mastercard;
- other service rendered or other goods received: Reason code 51 – for Visa, 4853 – for Mastercard;
- the payment amount was changed at the initiative/fault of the seller: Reason code 80 - for Visa, 4831 - for Mastercard;
- funds were debited from the card twice: Reason code 82 - for Visa, 4834 - for Mastercard;
- the operation was performed without the consent/knowledge of the cardholder: Reason code 81 - for Visa, 4863 - for Mastercard.
The application review process can take several months. But it's better to get your money back later than never. Agree?!
And now the pitfalls
Theoretically, the procedure seems simple. Having found an illegal “zero” on his deposit, the trader calmly goes to the bank and fills out an application. And then waiting for a refund.
In practice, there are many different nuances that can interfere with the return of funds.
For example, a broker in a "graceful move" might show the bank a section of the agreement called "Risks" or "Risks." And since the agreement was voluntarily accepted by the trader, the issue of a refund is often removed automatically.
Further. Chargeback rules are largely determined by the bank, and certain statutes of limitations apply to payments.
Another sad news is that the amount of funds equal to the size of the transfer is returned. You can immediately forget about the payment of profits. On the other hand, many victims are happy to return at least their hard-earned money.
However, there are often difficulties when applying for a chargeback:
- the Chargeback Guide and Dispute Management Guidelines for Visa Merchants can only be found in English; unfortunately, there is no adequate translation into Russian yet;
- the application must be translated into English, and it is not recommended to use templates - then there is a possibility of the same template refusal;
- be prepared to track the progress of the application; the bank may generally refuse to consider it - you will have to immediately be persistent.
That is, the reason for non-return of funds can be banal and even more offensive - laziness or incompetence of banking specialists. In the absence of a clear evidence base or answers when requesting additions, one should also not count on a successful outcome.
Difficult? Yes! But real.
In most cases, the money can be returned. To do this, from the very beginning, determine a competent strategy of action for a particular situation.
If your funds are lost on the account of a fraudulent broker, you can consult for free on the issue of a refund. Leave a request in the form below. It is possible that with a competent approach, your situation can be resolved in your favor.