ABSystems review – 5 things you should know about absystem.pro

ABSystems review – 5 things you should know about absystem.pro

Rating: 1

Beware! ABSystems is an offshore broker! Your investment may be at risk.

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ABSystems is an offshore broker that offers trading in Forex, Indices, Stocks and Commodities. They have four types of accounts starting from a $500 minimum deposit requirement up to $50,000. They also have different trading conditions, promising lower spreads for higher initial deposits.

To register for an account we had to provide First and Last names, Email address, Phone number and Country. At completing the process successfully we were redirected to the client area, but there was no confirmation or any other email sent to our mailbox. This is a sure sign that not everything is legit with this broker since any provider of online services, especially financial ones, will make sure there is an email engine implemented on their website.

ABSystems Regulation and safety of funds

According to the footer of the website, ABSystems or Arbitrage Brokerage Systems has company registration number: 2020 / IBC00061 and registered address at 8 Copthall, Roseau Valley, 00152 Commonwealth of Dominica. Dominica is an offshore jurisdiction in the Caribbean that does not regulate forex brokers, which makes it an attractive destination to register a company in a quick and easy way.

Their Support page provides phone numbers with country codes from Spain, Poland and Russia, as well as email addresses. Throughout the broker’s website we find a number of claims about safety of funds, competitive conditions and transparency – check it out:

Reality is quite different, however – last month Germany’s regulator, the Federal Financial Supervisory Authority (BaFin) put the broker under investigation for offering unauthorized financial services. The Austrian Financial Market Authority (FMA) also warned investors against doing business with this brokerage – see for yourself:

 

All that means ABSystems are misappropriating the requirements for licensed and regulated brokers, but since they are NOT regulated, there is no oversight over the broker’s compliance to them. The claim for negative balance protection and safety of funds aimed at providing a false sense of security to investors is a common tactic used by many scam brokers.

Top watchdog agencies, such as the Financial Conduct Authority (FCA) and the Cyprus Securities and Exchange Commission (CySEC), impose strict rules on their licensees – Client Account Segregation requires that clients’ funds are kept separate from the broker’s operating funds, while Negative Balance Protection ensures that traders cannot lose more money than what they invested. Other policies include a Minimum Capital Requirement of 730,000 EUR in order to guarantee the broker’s good financial standing, and participation in Compensation Schemes, which provide additional assurance for investors’ funds up to a certain amount (85,000 GBP in the UK and 20,000 EUR in the EU).

ABSystems, however, is an offshore, unregulated broker, so anything they say or promise on their website should be taken with a grain of salt. They may claim your money is safe with them, but we would not advise risking that.

ABSystems Trading Software

The broker offers the MetaTrader 4 (MT4) platform as a Desktop and mobile (iOS and Android) application and a Webtrader web-based “platform”. MT4 is the world’s number one platform, preferred by more than 80% of users. It offers an intuitive and user-friendly interface, sophisticated charting and analysis tools, as well as copy and auto-trade options. It can be further customized to create different trading strategies using its proprietary MQL4 programming language.

The Webtrader on the other hand is a rudimentary software, quite lacking in terms of design and functionalities.

We recommend investing with brokers that provide access to established trading platforms such as the MT4 or its successor, the MetaTrader 5 (MT5).

ABSystems Trading Conditions

As we see in the Accounts screenshot, the broker claims their beginner account is STP (Straight Through Processing), meaning there is no conflict of interest between them and their clients because orders are sent automatically directly from the trader to the liquidity provider without passing through a dealing desk. The more advanced accounts should be even more favorable to traders, connecting buy and sell orders through an electronic communication network (ECN). Unlike market makers, which profit from the Buy/Sell difference (spread) they offer to the traders, STP and ECN brokers usually advance lower spreads, but charge commission on transactions.

In the other screenshot, however, we saw ABSystems advertising “no commission, no hidden charges” and the spread we see in the Webtrader, 3.0 for EURUSD, is very far from competitive. Legitimate, regulated brokers would never offer more than a 1 – 1.5 pips spread for EURUSD, anything wider than that makes the cost of trade very high and is not competitive at all. It guarantees hefty profits for the brokerage on the back of traders’ losses. All that means that either the broker is unclear about the terms and has copy-pasted terms and phrases, or is deliberately misleading investors.

ABSystems offers leverage up to 1:100. Although not excessively high, we must caution that trading on leverage comes with significant risks, especially to inexperienced traders. In theory it allows for bigger profits, but 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. The Australian Securities and Investments Commission (ASIC) also started restricting leverage for major currency pairs to 1:30 from March this year.

ABSystems Deposit/Withdrawal Methods And Fees

The brokerage offers Bitcoin and other cryptocurrency for deposit. The standard ones – credit / debit cards and wire transfer, become available when you enter a higher amount. Popular options, such as PayPal and preferred by traders e-wallets, eg. Skrill and Neteller, are not supported.

The minimum deposit amount is $250 – more than double the standards of regulated brokers which ask for $100 from the traders on average. The minimum withdrawal clause is also unfair – whereas most legitimate brokers do not put a threshold on the withdrawal amount for their clients, ABSystems requires a minimum of $250 for wire transfer and $100 for other methods.

The transaction fees the broker charges are quite unclear too – to quote from their AML and Deposit document “Withdrawals are exposed to withdrawals preparing and taking care of charges.” Although they also say that the “charge guideline is accessible on ABSystem”, we were not able to find any specific information, so these fees might be excessive.

Considering all that – the regulators’ warnings and the unfavorable trading and financial conditions, we warn our readers to stay away from ABSystems as they are an unregulated, offshore broker – definitely a scam!

How does the scam work?

Users often fall prey to very simple but quite efficient scams. The first snare is usually an internet ad promising big profits over a short period of time, and all you need to do is provide your personal information, usually email address and phone number. If you do that, you will start getting calls from scam brokers who will continue with the pitches of quick and easy profits until you decide to make a first deposit of $200 to $300. On these funds the scammers get a fat commission and transfer you to senior “brokers”.

These expert con-artists are smooth talkers who start talking you into putting even more money in, because “now is the perfect moment” or “the more money you invest, the higher your profits will be”. Usually about this time most traders will start to feel the scam and will want to withdraw their money and get out fast.

Unfortunately, the scammers will not give in easily. First, they will try to persuade you not to withdraw right now because you will miss out on “big profits”, and if that does not work, they will find numerous reasons to deny or delay your request by asking you for additional documents or claiming that there are some other causes for not executing the withdrawal. The ultimate objective in such procrastination is to make the traders miss the crucial period in which a chargeback request can be filed, and thus lose the chance of getting their money back.

What to do when scammed?

If you used a credit card to make a deposit with the scammers you should immediately file for a chargeback. Both VISA and MasterCard have increased the time in which you can file to 540 days, in part specifically to fight such online scams.

If you used bitcoin or some other untraceable source, however, chances of recovering your funds are slim. You might get approached by so-called “recovery agents”, but don’t fall for their tricks. They will ask for payment up-front to recover your money, but this is just another scam and you will not get anything back.

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