Beware! ValueFX 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.
ValueFX advertises as a broker trading in forex, crypto and options. Upon opening their website, we are struck by the lack of features and poor design. The site does not even have SSL encryption.
They do not have different account options, not even a demo or trial account is presented. There is only a PAMM Account (percentage allocation money module / management) – a form of pooled money forex trading: an investor gets to allocate his or her money in desired proportion to a qualified trader(s) or money manager(s) who charges a percentage of the profit. We did not see any examples, however, so we have no idea what this percentage might be.
At the same time, ValueFX claims to be “the world’s leading social trading platform”. Social or copy trading means following the trading activities of a successful trader. The main difference from PAMM is that investors do not transfer their money to the managers’ accounts. Both PAMM and copy trading may have positive aspects; the main thing an investor has to check before entrusting his / her funds with brokers offering such trading instruments, however, is whether they are licensed by a recognized regulatory agency – we will explore ValueFX in this respect below.
Registration was very simple – all we had to provide was first and last name, email address, phone number and choose a password that did not have any security features. The process was successful and we were taken straight to the trading area – there was no confirmation or activation email or message of any kind, which is quite unprofessional for someone who wants to gain your trust to invest with them.
The trading area was even more incompetent than the website. The Investments link returned a “404 Not Found error”, while the About tab opened a page with a broken design. This initial examination of the website and trading area alone raises significant concerns with regards to the safety of funds invested with ValueFX and we started suspecting foul play.
ValueFX regulation & safety of funds
ValueFX is registered with the Companies House of England and Wales and lists a UK address and phone number on its Contact page. It claims it is licensed as an Investment Firm, authorized to provide the investment services for trading in financial and commodity-based derivative, instruments and other securities as specified in their Terms & Conditions. The Companies House registration does not license investment brokers, however; in the UK this is done by the Financial Conduct Authority (FCA).
Similar to the Cyprus Securities and Exchange Commission (CySEC), which regulates forex brokers in the EU, the FCA imposes strict rules and guidelines to the companies they license in order to guarantee the stability of the brokerage, as well as the safety of the traders’ funds. Such rules include Minimum Capital Requirements (€730 000) to assure 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).
ValueFX, however, is not regulated by any watchdog organization and we can safely conclude that it is not licensed to offer financial services and investing funds with them entails significant risk.
ValueFX Trading Software
ValueFX claims their platform provides transparency trading and a very unique and intuitive interface to manage your investment. We did not find any trading platforms available for download at their website or trading area, however.
Respected brokers usually offer the MetaTrader4 (MT4) or the MetaTrader5 (MT5) trading platform. MT4 is considered the leading platform worldwide, preferred by more than 80% of users. 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. Its successor, MT5, has certain advantages over the MT4. It enables traders to execute trades on different financial markets (including exchange-traded stocks) through a single account and has more trading instruments and more indicators than the older version.
ValueFX Trading Conditions
With regards to the trading conditions again we find only boastful, but unsupported claims. Spreads from 0.1 pips are too good to be true, even top regulated brokers rarely offer pips lower 1. Their liquidity provision is also just an empty statement, not substantiated by any evidence.
There is no information about leveraged trading also. Non-regulated brokers enjoy no restrictions on leverage and though high leverage provide huge profit potential, it also presents great risks to the traders because any losses incurred will be multiplied. That’s why EU and the US imposed leverage caps for retail brokers of 1:30 and 1:50 respectively.
ValueFX Deposit/Withdrawal Methods And Fees
As we noted above, the website does not advertise any payment transaction methods, which is one of the main things investors want to know and hence every respected broker puts forward in a prominent place. In the trading area, the Deposit link displayed 3 options – Bitcoin, Wire Transfer and Debit/Credit Card. The latter, however, was “Not Available for your country.”
Unlike credit card transactions, where you can file for a chargeback with your financial institution, Bitcoin is a preferred method of scam brokers as it is completely anonymous and untraceable. Popular methods, such as PayPal and other preferred by traders e-wallets, eg. Skrill and Neteller, are also not supported.
In the Terms and Conditions we read the following: “In order for the Company to execute a margin trade on behalf of the Customer, a minimum margin deposit of $5000 (five thousand USD) must be paid in the Customer’s account.” This is an extremely high amount for a minimum deposit and raises a huge red flag that this might be a fraud.
We could not find any information about the fees the broker charges for withdrawal, which basically means they can be anything. Considering the lack of regulation by a respected watchdog agency and vagueness of their trading conditions and fees, we have enough reasons to be certain that ValueFX is involved in foul play and we recommend to our readers not to risk investing with them!
How does the scam work?
This section is dedicated to showing how the most common scams work. Usually they are pretty simple and straightforward. Through internet ads promising quick and easy profits from forex trading potential traders are induced to enter their personal information, such as email and phone number. Once the users input this information, they will start receiving unsolicited calls from illegitimate broker representative whose job is to persuade them to make the first deposit of about 300 USD, from which they make a fat commission. When this is done, the traders are transferred to senior scammers who are very good talkers and will start working on them to deposit even more money. At this time, if not earlier, most people will start suspecting some fraudulent activity and will want to withdraw their funds.
This however often proves impossible to do as the scammers put all their resources into convincing them that now is not the right time or that such action will lose them a lot of money in “potential profits”. If the users persist, these con-artists will find a number of excuses, usually hidden in the clauses of the accepted agreements, to delay withdrawal requests for as long as possible. The end purpose is to miss the limited time period for filing a chargeback with their bank and thus lose any chance of getting their money back.
What to do when scammed?
If you have deposited with VISA or MasterCard there is still a chance to get you money back since recently both companies extended their chargeback period to 540 days, especially when an online scam is involved.
Scammers will not stop at stealing directly from your bank account if you have provided sufficient details, so if this is the case be sure to change your password or security code right away.
Also beware of being scammed again by so-called “recovery agents”. They will ask you to pay a fee to recover your losses, but after paying them you will never hear from them again.