Beware! CFSUM is an offshore broker! Your investment may be at risk.
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CFSUM is a Forex brokerage presumably registered in Estonia. It provides a web-based trading platform, not the MT4 trading terminal and clients are extended a generous but balanced leverage of 1:50. Furthermore, there is wide range of trading products from which to choose and a spread of just 0.4 pips which is quite low and very favorable for traders. There is a required minimum deposit of $250 which is standard for the industry.
CFSUM regulation & safety of funds
According to the website the company behind the brokerage is registered in Estonia by the name Bestfolio Consulting OU with a registered address Harju maakond Tallinn Kesklinna linnaosa Narva mnt 5 101 17. Estonia is a member-state of the EU and has diligently included online Forex trading within its regualtory framework. However, after checking with the online registry, we can safely conclude it does not hold a license by Finantsinspektsioon. As a matter of fact we know of only one Forex brokerage that holds a license from the country’s financial regulator – Admiral Markets.
Due to the minimal information available on the web regarding Estonia many shady brokerages have taken advantage of the country’s presumable reputation as having a very liberal approach towards online trading and have purposefully mislead traders they are regulated by the Ministry of Economy. However, the Ministry does not regulate Forex trading and we can say that CFSUM does not attempt such a nasty trope. The brokerage does not mention a license anywhere on its website.
The brokerage provides clients with a pretty decent web-based trading platform with crisp charting and user-friendly interface. There is also a test-drive available and we could see an extremely favorable spread of just 0.4 pips and a very balanced leverage of 1:50.
Regardless of the many advantages of the brokerage, the lack of regulation inclines us to believe that potential clients of the brokerage 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 FCA 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.
CFSUM Investments deposit/withdrawal methods and fees
Potential clients of the brokerage may deposit or withdraw via Visa, MasterCard and wire transfer
Going through the terms and conditions of the brokerage, we did find quite a few troubling provisions. There is a very excessive minimum withdrawal amount of $1000 for wire transfers and $100 for withdrawals via credit/debit cards. Such an extreme minimum withdrawal amount should not figure among the terms of a legitimate brokerage and makes us question the intentions of CFSUM.
Furthermore, in the terms and conditions we read there is a whole plethora of fees in store for clients. There is a monthly maintenance fee of $50, a clearance fee of 1 percent on all executed trades, an overnight fee, as well as an incomplete verification fee of $100 if the client has not verified their account after two months. Such excessive and absurd fees should not figure among the terms of any brokerage.It seems as though CFSUM is just waiting for clients to deposit and afterwards slowly siphon away the funds through an amalgam of phony fees and charges. Quite disappointing, having in mind all the advantages previously outlined regarding the brokerage.
We advise traders stay away from the brokerage and to always be diligent and 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?
Information is a pretty solid criteria for judging a brokers legitimacy. Scammers would not share much of their information, because precisely there inconsistencies and irregularities may appear which expose the whole set-up. A good example is this very broker and the misleading information it gave regarding its regulatory status.
After informing themselves for the brokers trading conditions – traders should be well-versed in the way of the scam:
Through clicking an ad with promises for fast money, you will be redirected to a website such as Bitcoin Evolution or Crypto Revolt where registration will require you to give your 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 motive here is quite straightforward – traders have a limited time window for filing a chargeback with their bank and get their money back. The “recovery department” will simply want to mislead you into missing this crucial period and, along the way, losing any chance you might have of getting the money back.
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. Furthermore, due to the high instances of fraud – both Visa and MasterCard have decided to sidestep scammers as best they can in forex trading. The first thing we have seen so far is that MasterCard has increased the previous time period of six months for filing a chargeback to a year and a half with their peer Visa expected to follow suit in December.
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!