Beware! FXOne is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
ForexOne is a CFD brokerage we believe is based in Estonia. It provides the Sirix terminal, not the MetaTrader 4 platform. The leverage extended to traders is quite generous at 1:500 but the spread is high and unfavorable and amounts to 3pips on EUR/USD. The required minimum deposit is the industry average of $250.
ForexOne regulation & safety of funds
Reading through the website of the brokerage we first learn that it is owned by an Estonian company registered with the name HB Enterprises OU. We remind readers that Estonia is a member-state of the European Union and online Forex trading is duly integrated within its regulatory framework which is modeled after the ESMA guidelines. We also read the name of another company registered in the Marshall Islands which isn’t a good sign from the get go since the Marshall Islands are infamous for sheltering many Forex hustlers.
We find no mention of a license by the Estonian authorities – thus we may safely conclude that the brokerage EliteTrading does not fall under any regulatory oversight whatsoever. On top of all this, it appears that EliteTrading has been exposed by the Italian CONSOB and the Spanish financial watchdog CONSOB as an unauthorized provider of financial services. Such a scam operation is a clear-cut sign of trouble in Forex. This leads us to conclude that trading with it may be tied with a substantial amount of 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.
ForexOne trading software
The brokerage does not provide the MetaTrader 4 trading platform which we always consider a huge advantage since it is the foremost trading terminal at the moment equipped with features such as almost a 100 market indicators, as well as customizable trading robots. However, the Sirix platform is available which isn’t a bad choice. Through a demo account we saw that the spread amounts to 3 pips which is absurdly high and definitely unfavorable. It appears that besides the security risk, Elite Trading doesn’t even provide tempting trading conditions.
ForexOne deposit/withdrawal methods and fees
Clients may deposit or withdraw via the standard Visa and MasterCard, as well as bank-wire. Going through the terms and conditions of the brokerage we did come upon provisions which are worth noting.
There are withdrawal conditions pertaining to accounts that have taken advantage of the bonus promotion. A trader has to achieve an undisclosed trading volume in order to be eligible for withdrawal which is purposefully excessive in order to impede any trader from actually receiving his money. We could not find any withdrawal fees or dormant account fees, however, we did read that the brokerage vies itself a loophole stating that it may charge such fees if it sees fit. Having in mind the regulatory uncertainty, as well as the official warning, we are inclined to suspect that the broker might charge such fees to the surprise and distress of potential clients. We do read that the brokerage needs at least three weeks to process a withdrawal request which is something we also view with a certain dose of suspicion.
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 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!