Disappearing Broker Complaints
The story is quite familiar. Someone signs up with an unregulated broker who promises them they will make a fortune on forex or crypto trading. They may or may not make money on the initial trade. When they try to take profits and withdraw money, the broker will urge them to make additional trades. At some point, the client will have made so many deposits with the broker that they are in quite a vulnerable position. They may fall victim to a disappearing broker.
This means the broker will stop communicating, lock the client out of their account and block the person from communication on WhatsApp, email and social media. In the case of a Ponzi scheme, the disappearing broker will cease providing services for all of their clients and will seem to vanish without a trace.
When this happens, it can be a challenge to get your money back, but FundRecovery UK may be able to help.
FundRecovery UK will prepare your case and be your advocate. Our professionals have expertise and strategies that will improve your chances of getting your funds back. We consult with clients, assist them with intelligence reports and negotiate with banks and other institutions. Ask us about chargebacks, wire recalls intelligence reports, and crypto recovery.
The Problem of Disappearing Brokers
Online trading scams are becoming more prevalent. Part of the reason for this is that more people are doing things online than ever before. After all, if people are shopping, learning and socialising online, why not trade online as well?
The advent of COVID-19 saw a rapid increase in online frauds of all types, including forex scams and crypto scams. As people were under lockdown and many were unemployed, the idea of trading to make money became appealing. It should be noted that it is never safe to invest or trade in lieu of a steady job or a solid income. Investing should be an activity that is intended to expand one’s savings or nest egg, but should not be relied upon for basic needs.
However, those who push online trading scams often try to appeal to people who are out of work, have work available but prefer to find ways of making money at home and those facing financial uncertainty and debt. These investors are seduced by claims of impossible returns from trades. They may find these unregulated brokers through social media, cold calls, email spam or internet searches.
How Disappearing Brokers Work
Unregulated brokers tend to use aggressive marketing techniques. They will use mass mailing or cold calling to try to find anyone they can find to open an account. They will also claim unrealistic returns on trades and and promise specific returns on risky assets.
Regulated brokers do not make such promises. The amounts will be much higher than for licensed brokers. For instance, they will offer a return of 100% monthly, when a reliable broker offers an average of 10% per year.
These brokers will do anything to get as many clients as they can and will urge clients to deposit huge sums and then repeat deposits. They use the same psychology as a sham casino and when the customer asks to withdraw money, the broker will claim that if they keep their money in the account, it will accumulate into a huge sum. Therefore, the customer may decide to do nothing and let the broker trade their money. However, in many cases, no trading is taking place.
Dodgy brokers may use several tactics to encourage clients to deposit more money in their accounts. They may instill a false sense of confidence by returning a small amount so the customer may feel they are reliable. The broker will then claim they can return even more money to the client if they deposit more into their account.
The next trade could be a losing trade, even though no real trading occurs (of course, like a sham casino, the trades are rigged and planned ahead of time because they are not genuine). The broker will give the client ‘advice’ on how to recoup their losses. They will tell the client they need to trade more to make their money back. No one wants to feel as if they lost something, so the client will deposit more money and hope they can save face with the next trade.
At some point, the broker will disappear. They may disappear for one specific client or in the case of a Ponzi scheme, they could completely vanish once they can’t fund withdrawals from deposits from new clients. Forex scams often disappear once they feel authorities are on their trail.
Sometimes the broker will keep operating and seem to disappear for a few specific clients. They can block out emails and messages from the person and lock them out of their account. Disappearing brokers will often ghost people in this way or they will make an excuse and say that there are technical problems. Meanwhile, the disappearing broker will launder the money and it can be difficult to get money back.
Recovering Your Funds with a Disappearing Broker
With a disappearing broker, fund recovery can be more challenging than with a broker dispute. If the broker is still communicating with you and is acting in good faith, it is easier to deal with than if the broker disappears without a trace.
Fortunately, in many cases, these disappearing brokers are found, but individuals usually can’t accomplish this on their own. They need assistance from professionals. Those with experience in fund recovery have methods and databases that are crucial in finding disappearing brokers. They often know how to act on clues and leads and work with regulators and law enforcement to find scam brokers and prevent money laundering.
When working with a financial company, provide as much information as you can about the broker, including screenshots of messages, websites, landing pages, and other materials that can give clues about the identity of the broker and hints about how to track them down.
Consult with Fund Recovery UK if you are trying to retrieve your funds. Talk to us and we will map out a strategy with effective tools and methods to maximise your chances for fund recovery. Our professionals have a strong working relationship with banks and regulators and understand how to make a claim persuasive and successful.
