Beware! FinanceReserves 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.
When dealing with scammers you realise how inventive they can be in their effort to lure potential traders and fleece them of their hard-earned money. With FinanceReserves, though, it’s not the case. Only in December 2020, we published a review of their scamming schemes. And what do you expect they did? Some scammers after we reveal their false and misleading information and warn our readers are quick to open another website. They change the name of the broker, change the logo, brush up the interface, and voila, a new broker appears on the horizon for unsuspecting clients. But this one, we must say, has gone idle. This scammer has made the ‘great’ effort of changing just one single letter in its name and from FinanceReserve it’s gone to FinanceReserves. Oh, common! Can’t you do better? At least give us some challenge in revealing your fraudulent scheme!
FinanceReserves Regulation and safety of funds
If you look at the information of its website, you will see that there is hardly place on earth where this broker does not have a registration. FinanceReserves a.k.a. FRCM is allegedly owned and operated by Plus500UK Ltd. It seems that the company or its subsidiaries are all over the world – UK, EU, New Zealand, South Africa, Seychelles and Singapore. That should inspire confidence, right? Wrong! The image below which is a screenshot from the Financial Conduct Authority (FCA) register clearly shows that this company is a clone of a legit firm. A clone company means that the scammers steal the name and registration number of a licensed company and claim it as their own to fool potential clients. It’s needless to say that trading with such a broker won’t bring you any riches or joy.
Legit forex brokers are strictly regulated in the UK and they must jump through various hoops in order to get their license. All the requirements these brokers must meet aim at ensuring that they are well-capitalised and to guarantee the safety of their clients’ funds. First of all, licensed brokers must invest 730,000 EUR in the form of initial capital which is a measure to keep scammers away as they won’t deposit so much money for the benefit of looking legit. In addition to that, to guarantee the safety of their clients’ funds, brokers must keep those funds separately with tier-1 bank establishments, report daily on their transactions to avoid shady deals and provide protection against negative balance. In addition to that, licensed brokers regulated by FCA must participate in the local Financial Services Compensation Scheme from which, if the broker goes bankrupt, its clients will be reimbursed up to 85,000 GBP per person. As you can see there are a lot of advantages in selecting to trade with a UK broker. However, you must always check the FCA register to make sure that the said broker is really licensed and legit and to avoid falling into the clutches of shady brokers like FinanciReserves.
FinanceReserves Trading software
FinanceReserves is a forex broker trading in forex, commodities, indices, stocks and cryptocurrencies. Opening a trading account does not require much effort. The trading software offered to the clients consists of a web trader platform (image below). On the left, you see the menu with the trading instruments which in this case shows the forex currency pairs together with their bid/ask price. In the middle of the screen is displayed the chart of one of the major currency pairs, EUR/USD, with the fluctuation in its price in a given time frame. On the right, is the trading information about the same pair containing leverage, potential profit and buttons for placing an instant execution or pending order. From the bid/ask price for the EUR/USD currency pair, we find out that the spread is 10.4 pips. This spread is way above the industry average of 1.5 pips and the implications for traders are that the cost of transactions will be too high which will make it impossible to make a sustainable profit. Also, do not forget that brokers derive their revenue from the spread, so you can watch this broker getting richer at your expense.
If you take another look at the image below, you will notice that the leverage is 1:5. This is good, as low leverage does not increase much the risk of suffering a big financial loss in case of unsuccessful transactions. However, we must point out that in the account type information which is in the last image, the leverage shown there is not so low and depending on the account type can reach up to 1:150. Offering such high leverage shows again that this broker is a scammer. In the UK, licensed brokers have a limit on leverage and it cannot exceed 1:30. The regulation on imposing a limit on leverage aims at preventing traders from trading recklessly and exposing their funds at risk.
If you research some licensed brokers with a high rating, you will notice that they do not offer web trader platforms. A web trader is a cheap and very simplistic platform that does not do much to enhance traders’ experience. Every self-respecting and reputed broker will choose MetaTrader 4 or MetaTrader 5 over a web trader. Both platforms considering to be the Rolls-Royces of the trading platforms enjoy a well-deserved reputation thanks to the excellent package of trading tools and instruments they offer. For example, they are equipped with an auto trading option, code base with customs scripts, an app market, a financial calendar, trading signals that can be obtained for a subscription fee, etc. We should also mention the charting options and the technical analysis indicators that are out of this world and help traders predict the future direction of exchange rates and make a profit.
We strongly recommend finding a reliable and licensed broker that offers either of these trading platforms.
FinanceReserves Deposit/Withdrawal methods and fees
We found that there is a discrepancy in the information about the different trading accounts. On the company’s interface, they are listed as Basic, Silver, Gold, Platinum and Diamond. When you open the link, you get different information and the accounts are listed as Silver, Gold, Platinum, Diamond and VIP (screenshot below). Did we mention that this scammer is rather lazy?
The minimum initial deposit for the Silver account is 10,000 EUR. If you check out legit brokers, you will see that they ask for as little as $1-5 in the form of an initial deposit. 10,000 EUR is too high an amount and yet another sign that we are dealing with a scammer.
The deposit and withdrawal methods are only via credit card or bank wire which does not give much choice to the traders.
There is no information about the minimum withdrawal amount. However, clients are not allowed to withdraw funds in the first 30 days after making the deposit. We wonder why it is so. Perhaps to give time to the scammers to shut down the site and run away with your money?
Scammers often offer bonuses to their clients and this one is not an exception. If you are tempted to accept a bonus, then you must brace yourself to fulfil some impossible conditions. First of all, bonuses are funds belonging to the broker, not the trader and as you can imagine scammers do not like to part with their money but they have to lure you into their traps. Beware that once you accept the bonus, you will have to execute a trading volume that equals 30 times the amount of the bonus and the bonus can be from 20% to 120% of the deposit. If you think this is easily achievable, then think again!
Legit brokers will never offer bonuses and this is the difference between them and the scammers.
How does scam work?
No one wants to be duped by scammers, but it happens all the time because they know how to manipulate people. As they say in one popular song “sweet dreams are made of this” and this is what scammers rely on – creating in people’s mind a sweet dream of being rich! Scams usually start by unsolicited telephone calls or ads on the Internet or social media promising quick and easy profit. It is easy to fall into scammers’ trap and once you make a deposit, you are done for! Scammers won’t let you get away easily even if you realise that you are being scammed. They will try to delay you when you try to withdraw your funds by asking you to provide this document or fill out this form, etc., in order to make you miss the deadline when you can file for a chargeback.
What to do if scammed?
You need to act very quickly. First of all, if you have made a deposit using a credit card, you must immediately file for a chargeback. Fortunately, VISA and MasterCard allow for 540 day period in which you can file for a chargeback. This is the good news. The bad news is that if you have made a deposit using bank wire or Bitcoin, the chances of you getting your funds back are nil!
Another thing you can do is cancel your credit card if the scammers have your CVV code. Check your PC and erase the software that gives scammers access to your personal data.
Be careful, because even doing all that we recommended, your unfortunate experience with scammers may not be over. There are so-called recovery agents. One of those may approach you offering to recover your funds for a fee. Do not trust them and always check the legitimacy of the recovery agent and the agency.
Also, be aware that some “victims” of scam may post comments after the review, saying how they lost money and how a recovery agent helped them retrieve their funds. They will even put the contact info for this so-called recovery agent. Do not trust them either as it is another case of scam!