Beware! FXOnspot 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.
FXonspot is a CFD brokerage based presumably in the UK. It provides the MetaTrader 4 trading platform and requires a minimum deposit of $250 which is just about the industry average and certainly in favor for traders. The spread on EUR/USD is at 1.7 pips which is a bit above what we would consider favorable.
FXOnspot regulation & safety of funds
The brokerage claims to be owned and operated by an UK-based company , however, does not give further information. We remind readers that brokerages operating on the territory of the UK have to be regulated by the Financial Conduct Authority. However, upon running a check through the online registry of the FCA we could not find the company’s name listed among the licensees of the British financial watchdog. Furthermore, while researching the brokerage on the web we came upon an official warning issued by the Financial Conduct Authority which reads that the brokerage is suspected in providing financial services without proper authorization and being involved in scam operations. The FCA warning and the the lack of regulation puts tremendous risk on any transactions interested traders may conclude with the brokerage and we deeply recommend they look elsewhere for viable trading options.
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.
FXOnspot trading software
The brokerage does provide the MetaTrader 4 trading platform which is something we always consider an advantage since the MT4 is among the foremost trading terminals in Forex trading at the moment, close to 80 percent of users prefer it. The platform provides an advanced charting package, lots of technical indicators, extensive back-testing environment and a variety of Expert Advisors (EAs). There is also an available test-drive which is a nice surprise since unregulated brokerages usually do not offer a demo account. Through it we could see a wide range of trading options and a spread of 1.7 pips on EUR/USD which is on the verge of what we consider reasonable.
FXOnspot deposit/withdrawal methods and fees
Even though the brokerage displays many logos on its website, potential clients of the brokerage may deposit or withdraw via only SecureMasterpay. The standard payment methods such as Visa and MasterCard, as well as bank wire, Skrill, Neteller are missing.
We did not find any stated withdrawal fees either, however, dealing with unregulated brokerage we may never be sure whether they wont charge unexpected fees once the clients have deposited their funds. But we did come across quite ill-minded provisions. Clients are allowed only one withdrawal per month and on top of this every next one will be executed upon completing a trading turnover requirement of 150 times the initial deposit. This illuminates the scam intentions of the broker and we warn interested traders not to put up any money with FXOnspot.
Such website are also the reason 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 Btcoinpro – 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!