Beware! AvaFinancials 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.
Reading the following review, it should come as no surprise that Avafinancials is not a legitimate broker. There was a warning issued against it by the CySEC that should dispel any credibility the company pretends to have.
Mind you, it is a big exaggeration to say that they convey any credibility at all. Even if it were not for the warning the broker would have quite a lot of trouble fooling anyone.
Stumbling onto Avafinancials’ site is truly an experience in incompetence. Most of it contains links that just lead back to the page the links were on and broken images. What is most shocking, however, is the complete lack for any ability to create an account on the website – once you fill out your registration form you are lead to a screen that demands you verify your account. That screen is, sadly, about as far as you can go in the account creation process. Such sloppiness is just inexcusable in the highly competitive field of Forex trade, doubly so for a company that claims to have been operational since 2011.
Avafinancials regulation and safety of funds
Avafinancials claims to be operating from Cyprus, home of the Cyprus Securities and Exchange Commission(CySEC). Additionally it claims to be licensed by multiple prestigious regulatory agencies – the Brittish Financial Conduct Authority (FCA), the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and the French Autorité de Contrôle Prudentiel et de Résolution(ACPR).
All of these bodies are tasked with ensuring that the inherent risks of Forex trade is limited as much as possible by employing a number of restrictions on brokers – for example a minimum capital requirement. In the case of the CySEC and the FCA this requirement is 730 000 euro. Another restriction they apply is requiring the companies to undergo strict supervision and report user trades on a daily basis. Further, licensed brokers are required to keep their clients’ accounts segregated. The regulatory bodies also extend a number of protections for the trader’s capital – for example the FCA requires brokers to participate in guarantee funds that recuperate lost deposits up to 85 000 pounds per trader. If Avafinancials were registered under any of them that would make a strong case for them being a reputable broker. Sadly, they are not.
Running a quick check with the CySEC’s database showed us that no such companies are registered under it. In fact, as stated above, the regulator has issued a warning against the company.
If we pretend to give Avafinancials the benefit of the doubt, although not warranted given the warning, there could have been a mistake, surely the license could have been acquired recently, or there could be any host of technical issues. Luckily the broker claims to be licensed not under one, but four reputable agencies and it should be rather easy to prove it. We ran a search on BaFin’s platform next.
Once again, no results. Not surprisingly the other two searches we ran returned no results.
Under these circumstances we have to assume that the broker is not licensed. Lying about being regulated by that many agencies is a big red flag. Every other claim the company makes about its security of funds – and it makes two, to be using segregated accounts and to be a part of a guarantee fund – are to be discarded as being lies as well.
So where does the company operate from?
First off, in the FAQ section of the website we can see that Avafinancials is registered in Switzerland as “Bull Invest AG”
However, this is certainly not the case. The way the answer is phrased is identical to the way it is phrased on the page of 500 index, another fraudulent broker that we have previously featured on our website here.
We believe that both Avafinancials and 500 index are pretending to be Bull Invest, which is an actual legitimate insurance company.
So having exhausted that lead we went to their “Contact Us” page. It gave us a Cyprus street address and a phone number. It is our strong belief however, that the address was picked at random from Google maps and just used to convey authenticity. That is a common tactic of scammers. The given phone number is also completely fictitious. There is no reason to assume a company based in Cyprus would use a phone number starting with +1, the United States code. Left with no traces we had given up hopes of discovering where the company was operated from, until we stumbled upon the following passage typed out in a very small print on the home page.
From it, several things become apparent – first off, it would appear that the company is a subsidiary of Avafinancials Group Ltd. We ran our searches on the sites of the CySEC, BaFin and other agencies with this new information, but the result was the same. The fact of the matter is that the given name and registration numbers don’t show any results in any of the registries we looked at, so this statement is simply a lie.
Secondly, the group that actually handles the trades is Avafinancials Overseas Ltd, and it is registered nowhere else, but the offshore haven of Vanuatu. Avafinancials Brokers does not execute any of the trades itself. Of course, Vanuatu is a preferred destination for scammers because of its low starting capital requirement and lack of other regulation. So by splitting the company in two subsidiaries they can claim to be playing by EU rules, while actually following Vanuatu’s lax legislation.
Avafinancials trading software
There is no way for us to verify any of these claims, as we simply cannot make an account on the website, but the company claims to be making use of the Metatrader 4 and 5 platform. They have proven themselves reliable and easy to use, over the years, plus they come with a lot of features. The features that make them the most user-friendly trading platforms out there are their advanced charting tools, for example the use of hundreds of indicators, the ability to easily draw trend lines, price channels and Fibonacci levels. Another reason they are the flagship platforms on the market are the sophisticated automated trading algorithms they employ – the expert advisors. These “advisors” are really bots that trade by themselves based on their programmed rules. They are developed by members of the Metatrader community and shared among it on the marketplace the platform gives access to.
Since the MT4 and 5 platforms are white-label software however, brokers often remove certain features from them. And since we cannot test out the platform we cannot verify all of its features are in place and working properly. If we take the broker’s word that they actually provide it for granted, that is.
As a side-note, the only information we can gather on the leverage the broker offers is from the website which promises us leverages of 1:1000. This is, to put it mildly, unrealistic if the broker were operated under EU regulations as it claims to be. There is a cap on leverages that regulatory bodies impose that only goes to about 1:30 for retail clients.
AvaFinancials Deposit and Withdrawal methods and fees
The links to the Terms and Conditions are nowhere to be found, of course, so the information we have on the deposit and withdrawal policies is quite limited to say the least.
The website mentions that the company accepts transfers using Bitcoin, Litecoin and Eterium as well as some more traditional payment methods – Western Union, MoneyGram and bank deposits. The minimum amount for a deposit is $500, which is incredibly high. There are reputable brokers with minimum deposits as low as $10, for example FBS. Of course, there are also reputable brokers with much higher deposits, say FP Markets, which requires a minimum of $100, but no-one goes as high as $500.
Withdrawal policies are not really clear either. Additionally there seems to be a 20% commission on winnings, which is way over the top.
How does the scam work?
Unfortunately, AvaFinancials is most definitely a scam. That much is evident from the warning that the CySEC issued against it, the many lies it tells and the general incompetence of the website. So how do such scammers prey on people and what is their goal? Well, the process starts when someone stumbles upon an ad, promising them to get rich quickly. They then follow the ad to a website much similar to this broker’s and register with their phone number and email account. This leads to a slew of spam emails and phone calls trying to trick the “broker’s” “customers” into depositing money. As mentioned above the deposit amounts are usually quite huge. That is because the scammers make their money from the deposits themselves and not the trades they make. Once they get their hands on the money they usually run the account at a loss so the victim of the scam is fooled into depositing more and more, as much as they can squeeze out of them.
What to do when scammed?
When scammed, there is not much room for recourse. You can file a chargeback on your transaction if you have used a credit card – Mastercard and Visa accept such request made within 540 days of the transaction. If you have used Bitcoin however, chances of seeing your money ever again are quite slim – Bitcoin does not offer a refund policy at all.
Additionally, you are advised to remove any and all desktop sharing software the scammers had you install, as they often will manipulate victim’s PCs through Team Viewer or AnyDesk without consent.
Finally, you have to watch out for further scams. You might get contacted by a recovery agency whose representative will tell you that they can restore your losses, but an advance fee is required first. Do not believe such claims. If you decide to transfer that fee to them, you will certainly only add to your losses.