Beware! Schatz Markets is an offshore broker! Your investment may be at risk.
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Schatz Markets is a CFD brokerage based in the UK with a wide range of trading options. It provides the MetaTrader 4 terminal and a spread on EUR/USD of just 0.8 pips which is quite below the industry average and very favorable. Furthermore, clients are extended a generous, but illegal in EU leverage of 1:300 and the required minimum deposit is twice the industry average of $250 and a bit excessive.
Schatz Markets regulation & safety of funds
We learn from the brokers website that the company behind the brokerage is registered in the UK by the name Schatz Markets LTD. All brokers registered in the UK must be licensed by the national regulator – the FCA – however, going through the website and the terms and conditions of the brokerage we couldn’t find any mention of a license. This is further cemented by the leverage the brokerage purports to provide in live accounts – up to 1:300. FCA-licensed brokerages have to comply with a limit of just 1:30. However, in the interest of fairness, we must say that the brokerage provides the MT4 platform, as well as a demo account. Here is a screenshot:
There is no mention of a license and having in mind the offshore location, we can safely conclude that Schatz Markets does not fall under any regulatory oversight, which inclines us to suspect that brokerages may be open to substantial risk.
We urge traders to exclude such risk in trading by only associating with brokers regulated by prestigious regulatory agencies, such as the ASIC and CySec, which require compliance with a number of strict rules that give significant assurance for the security of the clients funds.
The segregation of accounts is among the rules which are especially important in the trading world, because it drastically lowers the risk of possible commingling.
Another is the participation in a compensatory scheme by which the client’s losses will be covered in the unlikely case the broker goes bankrupt or attempts to swindle traders.
Schartz Markets deposit/withdrawal methods and fees
Potential clients of the brokerage may deposit or withdraw via Visa, MasterCard, FasaPay, Skrill, Neteller and Bank wire. Going through the terms and conditions of the brokerage didn’t come across any worrisome withdrawal provision that might not be in favor of the trader. However, many unregulated brokerages charge unexpected fees once the client has deposited funds.
This is why we advise traders to always put up only the required minimum deposit, instead of risking a bigger amount with no certainty. Afterwards, they may also try to withdraw a small amount in order to check for any unexpected fees or delays. Such fees and delays are usually the signs of a scammer.
How does the scam work?
Even though the forex trading world is extremely large and encompasses millions of people around the globe, the most common scamming is pretty simple and straightforward and as such – it’s not particularly daring to avoid. Here is a quick overview of how it is done:
Through clicking an ad with promises for fast money, you will be redirected to a website such as Bitcoin Evolution or Cashless PayGroup where registration will require you to give your address, email and phone number. After sharing your personal information, you will being receiving calls from brokers, compelling you to invest with them and win big. After a few minutes hearing their pitches, you decide to deposit some $200-250. And just like that – the scammers take a fat commission from this initial deposit.
After they are done with you, senior scammers begin working you into putting even more money. They say it’s the only way to profit from trading even more. After making the mistake of investing even further, you’ll begin wanting to get out of this and withdraw what you have left.
Unfortunately, the con-artists have no such thing in mind. They will now begin persuading you to wait it out and not withdraw right now. The angle here is pretty blunt – traders have a limited time period for filing a chargeback with their bank and get their money back. The “recovery department” will simply want to mislead you into missing thе crucial period and, along the way, losing any chance you might have of getting the money back.
It is important here to take notice that both Visa and MasterCard are taking measures to combat unregulated forex brokerages by classifying all forex transactions as high risk. And with the case Schatz Markets – they may be correct in doing so. Furthermore, supporting their intention with clear actions – MasterCard has increased the previous time period of six months for filing a chargeback to a year and a half. Visa is expected to do the same in December.
What to do when scammed?
As was mentioned above, scamming is quite the common in the trading world and, sadly, even you might suffer from it. In such an unfortunate case there still may be some available options for you.
You may contact your bank or credit card provider and file a chargeback.
If, however, you have provided the broker with your credit card details, immediately cancel your credit card.
If you have given information regarding your online banking pass – you should switch it asap!
Beware of potential calls from self-described “recovery agencies”! They prey on scammed and vulnerable traders who are desperate to recover their losses. They will require an “up-front” payment to help you, but after paying them, no such help will be coming your way!