Beware! RForex is an offshore broker! Your investment may be at risk.
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
RForex is an offshore Forex brokerage registered in St. Vincent and the Grenadines. It provides the MT5 trading platform, and an extremely generous leverage. Traders are extended a leverage of up to 1:100. Furthermore, there is a wide range of trading products from which to choose, but the spread of 3.5 pips is quite high and more than double the industry average. The required minimum deposit is $100 which is standard.
RForex regulation & safety of funds
On the brokers website we read that the broker brand is owned and operated by a SVG-based companies. Saint Vincent and the Grenadines is a well-known offshore zone and a preferred location for shady brokerage. We further read that the brokerage is in fact regulated by the SVG authorities. Here is a screenshot:
However, we must remind readers that the government of SVG has multiple times publicly stated that it does not oversee Forex trading and thus we may safely conclude that not only is the brokerage not regulated, but that it also shares misleading information on its website with the hopes of fooling misinformed traders.
The brokerage does provide a test-drive for the MetaTrader5 trading platform. Here is a screenshot:
On it we could see a spread of 3.5 pips on EUR/USD which is quite high and more than twice the industry average of a pip and a half. Furthermore, the leverage extended to clients is 1:100 which, however, hides the undesirable risk of losing more than the initial deposit. Overall, the lack of regulation and the questionable trading conditions incline us to suspect that potential clients of the brokerage 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 FCA 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 financial mechanism by which clients may be compensated if they suffer losses due to fraud or bankruptcy.
RForex deposit/withdrawal methods and fees
In the terms and conditions of the brokerage we did not come across any quite troubling provisions.
Many scammers choose not to disclose such information to would-be clients. Without proper information on the website we cannot be certain whether clients won’t be charged with any unexpected withdrawal or deposit fees once they invest. 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 Lidya Trade – 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.
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!