Beware! CFDMerchants 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.
CFDMerchants is a very shady broker – there are severe issues regarding its regulation and legal documentation. The company is not trustworthy in the least any any savvy trader would be wise to avoid it! Before we look into CFDMerchants in a bit more detail, we should probably mention the company does not really accept new clients at the time of writing – once we submitted our information, we were treated to the following message:
However, we never received an email with any further instructions. We cannot help but see this as a fortunate turn of events, as CFDMerchants is ridiculously shady – here is why, and what you need to do on the off chance you managed to make an account:
CFDMerchants regulation and safety of funds
CFDMerchants has the following to say about its regulation:
Of course, Luxembourg is a member-state of the EU – and as such, it takes a strict approach to regulating its markets, introducing policies like Negative Balance Protections to protect their integrity. The regulatory body watching over the markets in the Grand Dutchy is the CSSF CFDMerchants mentions – and we know for a fact the company is not licensed within it, because it contradicts the regulator’s policy regarding leverage – amounts of up to 1:500 are advertised, when the CSSF allows brokers to advertise ones of up to 1:30 to retail traders!
CFDMerchants trading software
CFDMerchants does not really mention what software it provides access to – and without access to an account we cannot know how it holds up to industry standard Metatrader 5. We cannot know any of CFDMerchants’ trading conditions either – although the broker does advertise leverage amounts of up to 1:500. This high amount is banned not only in the EU as we mentioned, but by most regulatory bodies. And yet, companies like CFDMerchants have it available, in a bid to gain more clients. Whenever you see a high-leverage broker out there, be careful – odds are, you are dealing with an offshore company!
CFDMerchants deposit and withdrawal methods and fees
CFDMerchants accepts deposits via credit cards, Neteller and Skrill – if you have deposited with it, you are in luck, as all of these methods are eligible for a chargeback. And filing one might be the only way you have of getting your money back – let’s take a look at CFDMerchants’ policy on fees:
The problem is that there is no table with fees on its website – and without a strict fees schedule, the broker is bound to abuse its clients with overwhelming fees!
How does the scam work?
CFDMerchants is undeniably running a scam – everything we mentioned above points to that. But the scam it runs is one we have seen hundreds of times before – here is how it all goes down:
First off, someone makes an account with CFDMerchants – they are required to leave a phone number with the broker. The scammers will then use this number to start calling around the clock, demanding deposits. If they get what they want, more and more money will be demanded, until the victim of the scam is either bled dry or realizes what’s going on – at which point the scammers will simply cut them off and move on to new targets!
What to do when scammed?
If you have been scammed, there are several steps you can take to make sure you limit further losses – first off, you should recall what forms of ID, credit cards and other sensitive documents you have given the scammers access to and get new ones issued immediately. Also, remove any remote control software they had you install on your PC.
Then, you would want to contact your bank and ask if you can file a chargeback – but even if the answer is negative, you should be careful with recovering your money. If, for example, you are contacted by a recovery agency, which demands an upfront payment for its services, you should know it to be a scam!
Finally, do not hesitate to speak up about your experiences – the danger of such scams is often underestimated, while anyone is actually vulnerable to them. Speaking up helps build awareness of the scam and limits its effectiveness – and what better place to tell the world about CFDMerchants than the comments section below!
