Beware! MBroker is an offshore broker! Your investment may be at risk.
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MBroker is a forex brokerage registered in Dubai. It provides the MT4 trading terminal and a generous leverage of up to 1:400. Furthermore, there is a wide range of trading products from which to choose but a required minimum deposit of the staggering $5000 which is quite excessive in our view. The spread on EUR/USD is at 2 pips which is quite high and certainly a disadvantage for traders.
MBroker regulation & safety of funds
The brokerage states on its website that the company behind it is registered in Dubai with the name M-BROKER MANAGEMENT LIMITED where online Forex trading is also quite popular. The Central Bank of United Arab Emirates is in charge of the oversight of Forex trading in the country, however, after a thorough search on its registry as well, we can safely state that MBroker is not regulated by any governmental body whatsoever.
Nonetheless, the brokerage does provide the MetaTrader 4 platform which supports all the well-familiar features. It has great charting package and support for technical analysis indicators and automated trading systems (EAs). Through a demo account we got a look at the platform. On it, however, we saw not so favorable a spread of 2 pips which is above the industry average of a pip and a half. Furthermore, the required minimum deposit is absurdly large at $5000. Usually brokerages require some $250 to start trading while MBroker requires clients risk too high a sum to get a taste of trading which we consider a big disadvantage.
Furthermore, while researching the brokerage on the web we came upon an official warning issued by the Spanish regulatory authority CNMV. It appears MBroker has been blacklisted by the authorities in Spain as a potential scammer. All this highly inclines 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. With the FCA the compensation is up to 85 000 pounds, where as with CySEC it is up to 20 000 euro per person.
MBroker deposit/withdrawal methods and fees
As is often the case with unregulated brokerages – we couldn’t discover any information regarding the payment methods supported by the brokerage. We only read in the terms and conditions that withdrawals via wire transfer and credit cards are accepted. However, due to the obscene amount of scamming in online Forex trading, we always advise traders to 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?
Unfortunately, the possibility of a scam looms over almost every trade in forex, especially if you are dealing with an unregulated brokerage. That is why we believe traders should be acquainted with the methods of a scam. Here is how it would typically go about:
Through clicking an ad with promises for fast money, you will be redirected to a website such as Bitcoin Evolution or Crypto Cash 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 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 rival 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!