Beware! OboFX is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
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OBOFX is a CFD brokerage based in Saint Vincent and the Grenadines. It provides the MT5 trading platform and a spread of just 1 pip on EUR/USD which is quite below the industry average of a pip and a half and in favor for the traders. Clients are extended a generous leverage of up to 1:1000, however, the selection of available financial products is quite poor.
OboFX regulation & safety of funds
According to the website of the brokerage OboFX is owned and operated by the company OBO Holding SV Ltd which is based in Saint Vincent and the Grenadines. Here is a screenshot:
The brokerage gives the same SVG address which is seen on the websites of dozens other brokerages. This means that it is registered offshore and not subject to any regulatory oversight because the government of SVG has multiple times publicly stated it does not oversee online Forex trading. We can thus safely conclude that OboFX does not fall under any regulatory oversight whatsoever. The lack of regulation is quite troubling because there is no guarantee of the legitimacy of the brokerage besides the word of the brokerage itself, which, when money is involved, hardly suffices. Furthermore, there is not authority to turn to in case clients fall victim to a scam. However, the brokerage does inform us about its trading conditions and it provides the Meta Trader 5 platform.
The MetaTrader 5 trading terminal is the foremost trading platform at the moment and preferred by more than 80 percent of traders in the Forex world. Through a demo account we could see a spread of just 1 pip on EUR/USD which is below the industry average of 1.5 pips and certainly an advantage. Furthermore, clients are extended a generous leverage of 1:1000. However, the selection of different CFDs on currency pairs is quite poor. All in all, the lack of regulation and the offshore location inclines us to believe that potential clients may be open to substantial risk.
Traders needn’t have to worry themselves with such risk if they choose to trade with a brokerage regulated and authorized by a prestigious regulatory agency. Such agencies are the Financial Conduct Authority in the UK or CySEC in Cyprus which have been leading names in Forex trading for some time now. Their regulatory framework is composed of a number of strict rules which prevent clients from falling victims to fraud. Such rules include the segregation of accounts which assures that commingling with the client’s money is not possible. Furthermore, a license by such a regulatory body entails participation in a compensatory scheme by which clients may be compensated if they suffer losses due to fraud or bankruptcy.
OboFX deposit/withdrawal methods and fees
Potential clients of the brokerage may deposit or withdraw only via credit card and bank transfer, popular e-wallets such as Neteller, WebMoney, Perfect Money, cashU, Skrill, FASApay are also supported.
Reading the terms and conditions we couldn’t notice any nasty withdrawal conditions, however, this should not be viewed as a guarantee. OboFX may always decide to come up with some unexpected fees once the clients has invested 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 OboFX – they are 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!