Beware! HedgeSpots is an offshore broker! Your investment may be at risk.
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HedgeSpots is a CFD brokerage we believe is based in Bulgaria. It provides а web-based trading platform, not the the MetaTrader 4 platform, and requires an exceeding minimum deposit of $1000. The leverage extended to traders is quite low at only 1:50, however, the spread is not disclosed.
HedgeSpots regulation & safety of funds
Reading through the terms and conditions of the brokerage we discover that the company behind the broker is registered in Bulgaria under the name Get Promotions Ltd. We remind readers that Bulgaria is a member-state of the European Union and online Forex trading is duly integrated within their regulatory framework which is modeled after the ESMA guidelines.
However, we find no mention of a license by the Bulgarian authorities – thus we may safely conclude that the brokerage HedgeSpots does not fall under any regulatory oversight whatsoever. For the sake of diligence we ran a quick search on the online registry of the Bulgarian Financial Supervision commission and can confirm that the brokerage is not licensed.
Another big problem with the brokerage is that researching it on the web we come across official warning issued by the Monetary Authority of Singapore which reads that the broker has been targeting traders without proper authorization and further taking part in scam operations. We highlight the danger in doing business with such a website since the people behind it do not answer to any authority and have no reason to uphold the client agreement. In other words – we believe that any potential client will be exposed to 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.
HedgeSpots trading software
The brokerage does provide a web-based trading platform, however, we always view the lack of MetaTrader 4 as a serious disadvantage. 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). Aside from that – although there is supposedly a web-based trading platform available, however, there are no pending orders, no expert advisors and it strikes us as fake. There are also no discernible trading conditions, however, the most disconcerting part is that there isn’t any relevant information regarding the spread on the website as well, and since the spread is at the center of Forex trading – we are sure the website is only a prop for a scamming operation.
HedgeSpots deposit/withdrawal methods and fees
Clients may deposit or withdraw via the standard Visa and MasterCard, as well as bank-wire, the e-wallet Skrill and Bitcoin.
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 a trading volume in order to be eligible for withdrawal which is purposefully excessive in order to impede any trader from actually receiving his money. On top of this there are both processing and handling fees which, however, are not specified and as such leave the door open for the brokerage to charge any amount he sees fit. Such ambiguities only serve to show how the website is planning to syphon the client’s initial deposit and nothing more. Legitimate brokerage which are regulated in Europe do not offer such promotions and even if they do, the information regarding potential withdrawal requirements is always presented straight-forward on the website, not hidden away in the terms and conditions.
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!