Beware! Fx Merchants is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
Fx Merchants is a forex broker, about which there is a warning, issued by the Financial Conduct Authority (FCA) in the UK.
What is more, in its presentation Fx Merchants says to be offering three account types, without elaborating on the trading conditions, but promising return on investment ranging between 35% and 80% – something highly unusual and misleading.
On top of that the minimum deposit requirement is as high as 50 000 USD, which is absurd, having in mind that with most brokers you can open a trading account with about 250 USD.
We should note as well, that when we tried to register and open a demo account to check the trading conditions with Fx Merchants first hand, we were transferred to the web page of another broker – Fx Returns, which is also unusual.
In any case our biggest concern with Fx Merchants and Fx Returns is that they operate without a license and that makes any investment with them quite risky.
Fx Merchants regulation & safety of funds
Fx Merchants has a contact address in the UK and Fx Returns says to be registered there as well. However, neither of the two companies is authorized by FCA or any other reliable financial authority, such as the Cyprus Securities and Exchange Commission (CySEC) or the Australian Securities and Investments Commission (ASIC).
Have in mind that investing with a unregulated broker comes with unreasonably high risk of loosing your funds to scammers. The problem with all unregulated companies is that the safety of your investment depends solely on the integrity of the people, who operate them.
On the other hand properly regulated brokers are required to follow strict rules, among which to file regular reports, to allow external audits, to keep all clients funds in a segregated, protected form creditors account, to maintain a minimum capital adequacy ratio and with some regulators even to insure the trading capital.
For example, traders with FCA brokers can receive back up to 50 000 GBP of their funds in case their broker files for bankruptcy. Similarly, traders with CySEC brokers are entitled to a compensation of up to 20 000 EUR.
Fx Merchants deposit/withdrawal methods and fees
With Fx Merchants, or actually with Fx Returns, (because when we registered with Fx Merchants we were directly transferred to the web page of Fx Returns), you can fund your account with Money Gram, Western Union, Neteller, PayPal, Perfect Money, Bitcoins and bank wire.
The broker, however, does not accept payments with credit or debit cards like VISA and MasterCard and that is a minus, as recently the two credit card companies significantly extended the periods in which an unhappy customer can file for a charge back.
How does the scam work?
Most people do not realize, how easily they can fall in to the web of scammers. Usually you will happen to watch a video presentation about an innovative trading app or software, telling you how effortlessly you can make a pile of cash, if you just apply to be one of the few chosen to test the new platform.
The video will be hosted on one of the so called robo- scam websites, like Bitcoin Revolution and Bitcoin Method where, if you agree to leave your e-mail and phone, you will be promptly transferred to the web page of a unregulated, offshore broker.
And next you will be invited to make an initial investment of just 250 USD and start making money right away. And do not be surprised that your first trades will be so profitable – scammers will simply manipulate your trading account so that you may get more easily hooked to invest more.
And that is when you will receive a phone call as well. It will be form a “senior account manager”, who will explain, that if you want to make some real cash you will simply have to invest more – what about 10 000 USD. And chances are you will invest those money as well.
In the beginning everything will seem fine, until the moment you decide to withdraw some of your funds. It will turn out this is not possible, because of some clause in the Terms and Conditions, linking your right to withdraw with some minimum trade volume requirement, connected to the welcoming bonus you have accepted. Of course, it could be something else, but the bottom line is scammers will refuse to give you any money back.
What to do if scammed?
Be sure to immediately file for a charge back with your credit card provider. Currently, if you are a MasterCard holder you will be able to do that within 540 days of your initial deposit and VISA will adopt the same rule in December.
If, for any reason, you have told scammers your online banking password or credit card number, immediately cancel your credit card and change the password for your online banking.
Finally, do not deal with the so called “recovery agencies”. Those people will simply collect an upfront payment without helping you in any way.