Beware! Profx700 is an offshore broker! Your investment may be at risk.
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Profx700 offers trading in Forex, Commodities, Indices and Cryptocurrency. The website advertises multiple account types, however we were not able to find more information on them.
The registration form was simple – we had to supply personal information, such as First and Last name, Email address and Phone number, but there was no choice of account type to support their claim. Furthermore, the confirmation page stated “You will get welcome email” but there was none in our mailbox. Instead the page displayed credentials for a traders room and the MetaTrader4 (MT4) platform in plain sight, which is against any privacy and security practices.
Profx700 regulation & safety of funds
Profx700 is a brand name of Profx, a UK investment firm incorporated in 2008 with headquarters in London. It claims to be regulated in Europe by the Financial Conduct Authority (FCA):
A quick check of FCA’s register, however, exposed this as a false claim as there were no results for “profx”. It becomes perfectly clear that further declarations by the broker of “Safety & Security of Funds” and “Tier-1 Liquidity” cannot be trusted too. In addition, the FCA regulates financial firms providing services to consumers and maintains the integrity of the financial markets in the United Kingdom. In the European Union this is done by the Cyprus Securities and Exchange Commission (CySEC).
Profx700 also claims that “Investor funds are insured and held in segregated fiduciary bank accounts that can only be used for client payment,” but since it is not a licensed broker, we have significant doubts this is the case.
Both watchdog agencies impose strict rules to the companies they license. These include Minimum Capital Requirements (€730 000) to guarantee good financial standing, Client Account Segregation (clients’ money is kept separate from the broker’s operating funds), Negative Balance Protection for traders (one may not lose more than the initially invested funds) and Compensation Schemes providing additional guarantee to clients’ funds up to a certain amount (85,000 GBP in the UK and 20,000 EUR in the EU).
In the case of Profx700 we can safely conclude that it is not regulated by any of these respectable organizations and there is a considerable chance it is yet another scam operation trying to cheat their clients out of their money.
Profx700 Trading Software
Profx700 offers the MetaTrader4 (MT4) trading platform as a Web, Desktop and Mobile (iOS and Android) applications. MT4 is an established trading software preferred by more than 80% of users around the world. It features an intuitive, user-friendly interface, advanced charting and analysis tools, as well as copy- and auto-trading options. It can be further customized to create different trading strategies using its proprietary MQL4 programming language.
We could not find the MT4 WebTrader platform. Despite Profx700 allegations that it is easily accessible by entering client login and password, select a trading server, and click the login button, we did not see such option in the client area. Such sloppiness tells a lot about the brokerage and confirm our suspicions of lack of professionalism and most probably fraudulent activities.
Profx700 Trading Conditions
One of the first thing we noticed when browsing the broker’s website was its boasting a spread of 0.1 pips.
This is an extremely low spread that even established and respectable brokerage rarely offer. When they do, it is to traders with a long record and large trading volumes. As expected, the EURUSD spread we were offered in the MT4 platform was of 1.4 pips which is not a very large spread, but is quite far from 0.1.
Profx also advertises a leverage of 500:1. Such leverage entails significant risks, especially to inexperienced traders. Although it allows for making bigger profits, one may incur great losses too, often much greater than the invested funds. That is why, most regulatory authorities impose leverage caps for non-professional traders: in the USA it is 1:50, while for brokers licensed in the EU and the UK it is 1:30.
Profx700 Deposit/Withdrawal Methods And Fees
Traders may deposit funds to their accounts via Credit or Debit cards (VISA or MasterCard) or Wire transfer in different currencies – USD, EUR, GBP. The minimum deposit amount is €200 – it is not a very big amount but still most respectable brokers do not require more than €50.
Although not mentioned in the Finance or the FAQ sections of the website, in the client area there are other options too – Skrill and Neteller are popular e-wallets preferred by many traders as they provide a certain level of anonymity.
It is a standard practice that withdrawals are credited back via the initial method of deposit. The refund policy states it will take up to 48 hours for our customer support team to approach your withdrawal request. After that they may contact you to confirm your request or to ask for additional information if needed.
In order to comply with AML (anti-money laundering) and KYC (know your customer) policies, all brokers require additional documentation, such as government ID and/or proof of residence, such as utility bills or credit card / bank statements. In the absence of any regulations governing this brokerage we suspect such stipulation may provide means for delaying the traders’ withdrawals indefinitely, as is often the case with scam brokers.
There are no withdrawal fees mentioned and the refund policy asks to allow 5 to 7 additional days after your withdrawal request is processed. Although such period is normal for wire transfers, it is excessive for credit/debit card refunds, as with the latter transactions are more or less instantaneous.
We also want to point out that there was no Bonuses or any other incentives this broker offers, which is often a clear sign of shady practices. Despite that, we have to reiterate that Profx700 is not regulated nor licensed by any renowned organization, and thus, investing funds with them presents considerable risks.
How does the scam work?
Here we will outline the most common scamming scenario. The first step is to capture the users’ attention with ads promising fast money. When they click on such an ad, they are redirected to a website that would ask to provide email address and phone number. This personal information is then used by the scam brokers who will start calling and asking to invest with them. The initial deposit is usually around $250 from which these brokers will make a fat commission.
After that, users are transferred to senior brokers. These are expert con-artists who will sweet-talk them into putting even more money. When the traders decide to get out, however, it turns out it is not that simple. The scammers will talk them into postponing their withdrawals or will draw out various reasons to deny the request. All of this is with the objective to miss the limited time period for filing a chargeback with their bank and get their money back.
We should note that VISA and MasterCard have recently taken measures to combat online scams and are classifying all forex transactions as high risk. Furthermore, they have increased the period for filing a chargeback from 6 months to 540 days.
What to do when scammed?
In the event you become a victim of such a scam there are some things you should know. If you used a major credit card to fund the account you should immediately file for a chargeback with your bank or credit card provider. In case you supplied sensitive financial information to the scammers, such as account details and passwords, you should cancel your credit card or change your pass.
If you used bitcoin or bank wire, however, chances of recovering your funds are slim. Do not get hooked by any “recovery agents”, who prey on scam victims, using their hopes of retrieving their money. These are just another type of scammers who will ask you for an upfront fee in order to get your money back, but once you pay them, you will not hear from them again.