52

I was contacted by a 'broker' in January, they said they're based in Switzerland (I'm based in the UK), and they asked to invest some money (as minimum as $1000).

They told me that my platform would be connected to the main one, so I will automatically follow the manual trades opened by professional trader with 8 years experience in trading.

They've sounded very professional and authentic, so I've invested few thousand Euros to try, along with their 100% equity credit on top of it. While progress was promising (they've doubled the balance), in the next week, they've told me that they purchased some information on some trading exhibition, so they're 99% sure about the next deal, and since they've earned my trust, they've asked for another 5000 to lower the risk. They sounded convincing, so it happened along with their 100% equity credit.

After 4 weeks, while keep updating me every few days about the great progress (without pressure), they've tripled my balance and earning my trust. However, now, they asking for another 20000 on top of it on their new big deal which I refused. This gave me the big red flag.


After searching, I've found one complaint on them online here, but it's not clear whether he just lost the money, also it doesn't confirm whether it's a scam, or not, and how it works.

Their domain website is around 1 year old. It's not clear who owns it. Their certificate has been authorized by Let's Encrypt (related post).



My agreement reads that I can't withdraw within first 3 months, but they could be gone before then.

How can I tell whether they're scammers or not for sure? If they are, what would be the best approach to get my money back?

  • 51
    @kenorb the real test will be if you can get that "tripled" amount out. Otherwise it's just words on a screen. – D Stanley Mar 8 '18 at 15:50
  • 129
    Never ever do business with a broker that contacts you first. – Chris W. Rea Mar 8 '18 at 16:30
  • 109
    "They've tripled my money in 4 weeks so far", no, they have not. Everything single thing they have told you is a pack of lies designed to extract more of your money from you. It's not your money anymore; you gave it to con men. – Eric Lippert Mar 8 '18 at 19:25
  • 67
    @kenorb Based on your profile you're an IT engineer – surely you realize that if you download software from them and their software receives data from their own servers, they can make it show you whatever they want? – Moyli Mar 8 '18 at 19:31
  • 77
    Today would be a good day to start questioning them. You seem very eager to be taken by this scam; if you're so convinced that they're legitimate then why are you asking us if it's a scam and then ignoring everyone who says "yeah, obviously"? – Eric Lippert Mar 8 '18 at 22:59
114
  1. They call you, instead of the other way around.

  2. They promise more than 10% a year return*.

  3. They ask you for rapidly increasing sums of money.

  4. Multiple unrelated domains use their exact website.

  5. They ask for more money in the "trial" period during which you can't withdraw money.

  6. You find ZERO positive references for the company.

  7. They provided an erroneous transaction history.

If you ever have an investment opportunity and encounter A SINGLE ONE of the above points, don't invest. If you encounter 2 of the above points, it's a guaranteed scam, although it may be a borderline legal one. You encountered 7. I'm sorry for your loss of money, take it as a learning opportunity and move on.

*In fact, they promise ~200% a month, which is ~53,144,000% a year. The good news is that means they only go for the most gullible targets (sorry for being so blunt), so you have a tiny chance of getting some of your original investment back if you involve a lawyer right now.

** The 10% rule assumes a relatively stable base currency like USD, GBP, EUR. If you're dealing in a currency with high inflation, the annual return in said currency often should and will be higher than 10%.

  • 16
    What's wrong with 53 million percent interest? :) Some commas would make that ever so slightly more clearly bat-poop crazy. – stannius Mar 10 '18 at 0:03
  • 37
    @stannius I tried, but using 1,000-separators on annual interest just feels wrong. – Peter Mar 10 '18 at 8:30
  • 2
    @MateuszKonieczny I can't find a way that's short, easy for novices to understand, and doesn't sound like the investment opportunity needs to predict inflation with high accuracy. – Peter Mar 10 '18 at 11:54
  • 3
    Add to the list: 8. They tell you they purchsed insider information. 9. They're 99% sure about the next deal. – Daniel Mar 15 '18 at 14:15
  • 3
    oh and 10. You can´t find a official record of the company in the respective company register of the country they are operating from. – Daniel Mar 15 '18 at 14:36
100

It is a scam. There are quite a few websites with different names but same layouts.

Generally difficult to get money back. You can try legal recourse

Found out one more website.

Related question I made an investment with a company that contacted me, was it safe?

  • 1
    xtradefx.com is newly registered (8/01/2018), and we can read here that Naveen Margan is the owner. I'm not sure if that's the same person (whether fake or not). Maybe the whole thing is some kind of broker business franchising using the same model and templates? – kenorb Mar 8 '18 at 22:23
  • 140
    @kenorb: It is not a legitimate franchising business. You are working very, very hard to believe that this is not a scam. You got scammed. That sucks. The sooner you believe that, the sooner you'll stop getting taken. Today would be a good day to examine what factors led to you being taken in by a confidence scam, to help inoculate you against future scammers. – Eric Lippert Mar 8 '18 at 22:41
  • 28
    Man, when the top of the page says "regulated and licensed", you immediately know it isn't. – Martin Argerami Mar 9 '18 at 2:49
  • This, this and this also seem to be the same. In fact a Google search for "about us" "forex trading" "partnerships" "online trading tools" "support" will find you loads of them. – h2ooooooo Mar 9 '18 at 17:41
96

This is part of highly sophisticated network of scammers. This scam is spread across hundred of websites (some list can be found here and here), most likely using "fake" or stolen details and they're very good at covering their tracks.

Scam broker checklist

  • They called you out-of-blue offering the great earnings. Check.
  • They pressure you to keep investing more. Check.
  • They've contacted you using one-way VoIP services, so you can't call them back. Check.
  • None of their phones numbers on their website are working. Check.
  • Their addresses on the websites are non-existing. Check.

    Note: You can hire a local private detective to verify that for you, but it costs.

  • You can't find their legal name and list of the directors. Check.

  • You can't find their company status and their license anywhere. Check.
  • They tell you to provide the legal info, but the conversation is always going to nowhere. Check.
  • They ask you do you do and how much you earn. Check.
  • They're using non-PCI complaint form to process your payments. Check.

    The PCI DSS applies to ANY organization, regardless of size or number of transactions, that accepts, transmits or stores any cardholder data.

How they start

  1. Scammer purchase the fully branded FX Platform startup package for few thousands dollars (like this). This comes with several necessary Forex licenses.
  2. They've got their business and financial licensing registered on some tax-free island such as Vanuatu or St. Vincent & the Grenadines. The license is a period of one year, so they need to be quick to start their scamming.

    Warning: After you sent them your legal documents, you could be one of the directors of such scam companies in Vanuatu or other tax-free island, hopefully you will never find out.

  3. They find some cheap IT company (e.g. in India) to multiple the same branding into many, including apps for Android/iOS.

  4. They may setup some temporary company in India (which can disappear later on) where all of their websites points to the same WebTerminal. They're using servers in India to send the automatic e-mails.

    Note: If you decide to sue the Indian company, court cases may take few years just to start.

How they work

  • They're using one-way VoIP services, so they can call you from any country you want to believe they're calling. This also helps them to isolate from the outside world, so nobody actually can contact them and verify nothing about them. They work like a ghost company.
  • When you ask them for the licenses, they tell you they have everything, but at the end, they never send you anything (the less you know, the better). At the end, you can never find out their real legal name.
  • When you report them to companies with who they've agreement (i-Pay, MQL5), they show to them their legal documents and existing licenses, no question asked. And they probably portrait you, as another client who lost his money in trading, looking for revenge. So the scammers can't disappear so easily.
  • When you apply for a chargeback, they may even fight back with their existing legal documents which you never seen, or know they have.
  • If you try to fight them, they're good at fighting back. I've reported them at MQL5, both of my accounts got banned for no reason.

    "Thank you for contacting us. Your accounts will not be restored. Best regards, MQL5.com Support Team"

  • They use one license spread across many different domains and fake companies.

  • They could use the valid, licensed platform, but with illegal plugins for the platform to fake the transactions. At the end, these are just numbers on the screen. However, you can't prove that.
  • At the beginning, they may trade on the real server (which they own), but as soon as they start their scam plan, they can switch to the demo server (at the end, it's just the IP address to where you platform client is connecting to). Then they operate on a demo server which they make you believe it's a real one. You can't prove that part either, without hiring some digital forensic team (which may costs).
  • The main goal of the scam is to take as much money as they can, then burn your account at the end (on their so-called live server), and blame you to not have enough margin, then lock you down.

How the scam works

  1. They call you out-of-blue (having your details on some scam "sucker's list" from the previous scammer) from some one-way VoIP numbers (any country code they like you to believe they're in).
  2. At first, you talk to the sale person (first line of contact). His goal is to generate as many leads as possible. After you proceed, you may never talk to him anymore. He doesn't care whether it's a scam, or not, he has a job.
  3. He redirects you to another scammer (the second line of contact), who explains to you about this no-brainer deal (your experience doesn't matter). He's expert in lying, explaining all your concerns about the company, financial licensing (which you never get), telling how bad other brokers are, how they hate other scammers and so on, basically everything that you expect to hear.
  4. You did your basic research by checking more information about them, have a glance at their list of non-working numbers and random-generated addresses, long terms and conditions which you don't have time to read (which coincidentally got missing links to the withdrawal form), but you still progress.
  5. You went through the registration process, so you can log in and decide to deposit the money through their non-PCI compliant form, since you feel safe seeing the nice green padlock icon (which just verifies that you're connected to the scam-site) and a lot of recognizable images of Visa and other banks.
  6. After you submitted your debit/credit card details, they got posted to another SSL-secured scam website which keeps them safe for future use. Most likely the payment gateway website is owned by another customer of theirs.

    scam Visa form

    Note: At this point, you're the one who initialized transaction. You knowingly sent them your money, so it's no longer a fraudulent transaction.

  7. Now, your money is safely deposited in bank located in some tax-free island. This basically was a one-way untraceable payment.

  8. You can't prove that part, but your money may never go to any trading account (not a single cent), it's too risky business even for them. Most likely, what you see from now, are just digits generated on the screen by their so-called live server.
  9. Since they've your payment card details, they're now missing your full address and pictures of your card (front and back). Make sure the pictures aren't blurred and you send them also the back of your card (you can cover the last 3 digits, so you feel safer, but having your address, it doesn't matter).

    Your payment details and address are enough to use for scammer expansion costs (new domains, hotels, taxis, - everything costs). If they buy some new domains or register new companies using your documents, don't worry, you'll be the their first line of contact.

  10. Now they're using MetaTrader4 platform to convince you that they're trading with your real money. Of course, they'll guide you step-by-step how to use it, and all that you need to know, in the order you to believe the number you see on the screen is the money you've invested. They can give you extra 100% credit on top of it, so you're motivated to top-up more.

    Note: Your money may never leave their bank account, or they may cash it.

  11. So you've downloaded the MetaTrader 4 platform from the official MQL5 CDN server, like:

    https://download.mql5.com/cdn/web/ID/mt4/fakebroker4setup.exe

  12. You run the platform and you login to FakeBroker-Live server. It's called Live, because it's the name of the file, so no question asked since it has been approved by MQL5 Ltd. If they tell you it's a live server, it must be, especially when you see some Ltd name next to it.

    Compromised files includes: 2dots-Live.srv, SunCapital-Live.srv, 4xBrands-Live.srv, Investment4Futures-Live.srv, UP4X-Live.srv, SolidPlus-Live.srv, StrategicFuture-Live.srv and many other. They all points to the same fake server, so if you've got an account, it will work on all of them. You can check this by extracting or installing the file, then running strings command in shell against these files.

    Warning: There is no clear indicator, whether your transactions are real or fake.

  13. Now, from whichever FakeBroker website you download the platform (the only difference are the filenames), they all are pointing to the same demo account server (you can find its IP by opening config/FakeBroker-Live.srv file).

    Warning: At the time when they applied for the license from MQL5, it could be a live server, but they can swap it anytime and you can't prove it.

  14. For the next weeks, they generate a good profit on their demo account (they make you to believe it's real). They keep you updated every few days, telling how hard it was to generate this profit (despite there are only few transactions). They don't need stop losses, as they've got a bunch of experienced scammers who're staring at the screens overnight, so you don't have to worry about it. They keep telling you about the trust and how sure they are.

  15. When they earn some trust, at some point you get redirected to more experienced scammer, so he can ask you about your personal life, family, plans and how much you earn, so they can calculate how much you can afford in order to deposit for their extra one-time offer deal, and of course, you need to be quick to make the decision on the same day.
  16. After your second deposit, they won't call you any more to your phone, but they'll use some one-time Instant messengers (such as Skype, since it won't expose their IP) registered with one-time-use Live account. It's better for them, as they don't have to spend on the phone bills.
  17. Guess what, they've now tripled your amount within a short period of time. They've found a holly grail.

    MetaTrader 4 platform, Forex, SunCapital-Live Account History, scam

  18. Since now they gained your trust with their unbelievable performance and professionalism, you are now part the final phase of the investment. They will ask you for the money which you can't easily afford for their unbelievable project where you can be rich within a month, so you can afford to buy a house or anything you like (all dreams come true). Since you can't afford it the deposit they're asking, they still want to help you to get into this project, any smaller amount (whatever you can afford right now) is good for them, however, they warn you about the risk. Of course, you can pay in installments every week to lower the risk (free margin), but you've been warned.

  19. The final phase of the scam. Whatever amount you've paid (big or small), the investment this time went wrong. What the coincidence. They've opened big positions which blew your account within few minutes to minus. What a tragic.

    MetaTrader 4 platform, Forex, SunCapital-Live Account History, scam

    "I am very sorry to tell you that the account now is empty, because of a fast rapid Bitcoin movement as a result of release data from US. There was nothing we could do about it."

    "The money was lost in the market and it happens the sometimes you win sometimes you lost."

  20. Now, they want to "help" you to recover the account, as it "happens", but will make sure it won't happen again. If you're rich, they may also ask you to give back the credit which they gave you for free, as they'll have to give it back to the bank (as it was a loan given to you). Since in Forex, the losses can exceed deposits.

  21. The last phase of the scam is to cut you off and lock your account for any disrespect reasons, so you won't find them easily, and you won't have any evidence of their existence.

    "I am going to cut you off from Skype, because you are very rude and disrespectful."

    "Don't talk to me anymore, don't write me. Our business is finished."

Tips and tricks

  • Record any phone or Skype conversations.
  • Take the screenshots of everything you think can be used as the evidence.
  • Don't give them any clues that you may know, as they'll cover their tracks immediately.

    For example, when I've told them that their withdrawal form got a different company logo on their website, they put me on hold and the file got removed, and the associated website has gone blank. When I told them about Wayback Machine next day, that you can still see it archived, after that, they put it back. So they learn very fast.


Similar situation with Sigma Option broker (I had the account with them as well), when people start complaining about not being able to withdraw their money, out-of-blue they've put their website to maintenance mode and disappeared. So the same could happen to this company, and 26+ other.

Resources

Check the facts

Here are few facts to check:

Actions to take

If it's a scam, then here are the actions to take:

In addition, if you're UK's citizen, you can:


  • 2
    actually spread betting and binary options companies are now (since 04/01/2018) required to register with the FCA, I checked after work yesterday but never wrote it up! – MD-Tech Mar 9 '18 at 15:19
  • 19
    Great self answer! – Masked Man Mar 9 '18 at 15:42
  • 12
    If you've had accounts at two different scam broker sites, you're almost certainly on a "sucker's list" that will mean you're the first to hear about all the new scams. Be very careful and good luck. – David Richerby Mar 10 '18 at 13:10
  • 12
    @kenorb It's not about not trusting brokers. If someone calls you, they are a scammer. If they are promising the chance astronomical returns or even modest returns with withdrawal conditions, they are a scammer. There are big, nice banks and brokers in the United Kingdom that will gladly do business with you. Use them. – Lan Mar 12 '18 at 16:22
  • 3
    So in few hours you went from arguing they're legit, to posting this super detailed answer on how this is scam. Did you change your mind so quickly? Nonetheless, tons of good information, +1. – void_ptr Mar 14 '18 at 4:01
28

You got a call from someone, out of the blue, asking you for money. How is this not a scam? Cold calling is a good indicator of a scam. You also seem to be in denial of that fact that you’ve been scammed. If you want to be 100% sure it is a scam, simply ask them for your money back. Any legitimate broker will return your money.

  • 5
    Many perfectly reputable investment businesses make perfectly legal money cold-calling 'high-net-worth' individuals and asking them to invest in things. It's simply another form of advertising. – Valorum Mar 10 '18 at 0:42
  • 4
    @Valorum Says the cold caller. – user31652 Mar 10 '18 at 2:07
  • 3
    Actually no, but neither am I some rabid "cold-callers must all die for having the temerity to phone me" fanatic. – Valorum Mar 10 '18 at 8:22
  • 2
    @Valorum many perfectly reputable investment business's fail to beat the market... – NPSF3000 Mar 11 '18 at 8:32
  • 2
    @Demonblack. Tomato, tomato. – NPSF3000 Mar 12 '18 at 19:15
11

Here's how the scam works.

  1. Find a "hot trend" that people hear a lot about, but don't really know that much about. BitCoin is always in the news, and there's already a lot of spam flying around about ForEx.
  2. Design a product that is designed to give new investors access to these "hot trend" markets. Make it a little bit clunky and technical on purpose, so investors can't quite grasp what is going on, but it mostly looks right.
  3. Aggressively market this product to these newbie investors -- who can be talked out of money, have an interest in the "hot trend" but unfamiliarity with the mechanics. Part of the customer screening is specific questions to gauge their familiarity.
  4. Have a system capable of generating fake data that looks correct and believable to someone who is not an experienced expert.
  5. Contrive a rule that the customer can't take their money out for an initial period after investment. This is vital because...
  6. Get the customer initially invested, then
    • Show them some initial wins "on paper"
    • ask for more investment
    • show them more wins
    • ask them for additional investment still - in the usual way of scams
    • this house-of-cards collapses if they want to pull their money out

What actually happens is the money is gone. What remains is smoke and mirrors designed to conceal that fact, and to pry more out of you.

Stop investing

Really, investment is an essential wealth strategy. But if you gravitate toward schemes like this which aren't even hare-brained, then you should simply stop investing until you learn what on earth you are doing, and start with Suze Orman or Dave Ramsey and a well rounded understanding of consumer finance generally.

The one thing you should invest in, is your retirement, via your country's equivalent of 401K or IRA, and you should invest in the market, and do it via index funds (and if you need more on that, read John Bogle's "Common Sense on Mutual Funds", but Suze/Dave first). This should be the most simple and boring choice possible.

  • There are a lot of weirdly computed and "exciting hot trend" index funds too, enough so that scammers can conceal themselves in that verbiage. Might be worth pointing out what "simple and boring" means (for the US it would have been Indexes on DJIA, Nasdaq, and S&P500, run by Vanguard, Fidelity, SPDR, or BlackRock/iShares... and above all, listed on Morningstar) – Ben Voigt Mar 11 '18 at 16:20
9

I'm not saying whether this is a scam or not, although it seems VERY fishy, but here's how the scam could work in a way that fits the facts:

  • You give them a thousand Euros, which they "invest" for you. After a few weeks, they astound you by showing you that you now have 2,000 euros in your account. WOW! A 100% increase in a few weeks!
  • They convince you to give them another 5,000 euros, which then grows to 14,000 euros. You have "earned" 10,000 euros in just a few weeks! You can even see that money in legitimate accounts.
  • They have now "earned your trust" and convince you to give them 20,000 euros.
  • They use that 20,000 euros to "magically" earn 10,000 euros for two new suckers and pocket the original 6,000 you deposited. Your money is gone.
  • 9
    They don't even need to tumble money if they have you never withdraw anyway. – bunyaCloven Mar 9 '18 at 7:34
6

Well, first of all, if they're investing, they're not a "broker", they're a fund manager. Standard practice is to have those two roles separate: there's someone who decides where to invest the money in the fund, and a different person has the actual power to allocate the money. Those roles not being separate is a major red flag. The Madoff fund, for instance, did not have these roles being separate.

Some basic questions:

-If something goes wrong, is there a person to sue? As in, you have the legal name of an actual human being, not just the name of a company? Can you verify this person's identity? What sort of licensing does this person have?

-Where are the profits coming from? How risky is it? Are the claimed profits plausible (note: 200% a month is not plausible)? What obligations does the fund have towards you?

-Is there a separate financial entity holding the assets, or are they buying the assets themselves, "on your behalf"? Does the fund manager have direct access to the money? That is, if they want to just move it all to their personal bank account, is there anything stopping them from doing so?

-Can they verify that they actually made the trades they claimed to make?

-How are they, personally, making money? That is, what fees etc. are they taking?

Note that even if it's weren't a scam, it would be at best a highly risky investment based on shaky assumptions of market behavior.

1

Reputable brokers and fund managers charge fees, they don't give you "100% Equity Credit on top" whatever that is.

I notice you didn't mention which shares or investments the broker claims to be holding for you. Did you check them out independently?

Sorry but I'm 99.9% sure you have lost your money.

Try telling them you have a mate that wants to invest $50,000 but he's waiting to see if you can actually get any money out. Then ask to withdraw half of your original investment. See if they fall for it. My guess is you won't get even that.

  • I've got the account with XM broker and they're adding extra equity credit on top of my balance (not 100%, but some) when I deposit, and they're not scammers. – kenorb Mar 12 '18 at 23:34

protected by Chris W. Rea Apr 12 '18 at 1:39

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