Beware! LondonTradingIndex 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.
London Trading Index claims to be a forex broker based in one of the world’s leading financial centers – London. Like countless other scammers, however, it is actually an anonymous offshore firm that does not offer the services it claims to.
LONDONTRADINGINDEX REGULATION AND SAFETY OF FUNDS
London Trading Index is trying to imply that it is a legitimate London broker not only with its name but also with its contact address. A registration number for the Register of companies England and Wales is provided on the website. There is indeed such a company – registered by a Sri Lankan national, with the nature of business stated as “management consultancy activities other than financial management”. But in the register of the institution that licenses and supervises brokers in the UK – the Financial Conduct Authority (FCA) – there is no trace of London Trading Index:
In a not so prominent place on the website it is stated that the company is actually incorporated in Saint Vincent and the Grenadines (SVG). Although this country has a financial regulator, Тhe Financial Services Authority (FSA), this institution has repeatedly issued warnings that it does not regulate the activities of brokers. The latest such warning dated 23 June 2021. It clearly states that the agency “does not issue any licenses to carry on the business of FOREX Trading or Brokerage or Binary Options Trading nor does the FSA “Regulate, Monitor, Supervise or License” International Business Companies which engage in such activities”.
So when you see a broker claiming to operate in the UK but is actually registered in an offshore area like SVG, it means that in all likelihood they are scammers.
In the case of the London Trading Index the legal mess is even bigger. The text of the Terms and conditions states that the client will actually be working with a “limited liability company formed under the laws of Belize”. But there is no licensed broker with that name in the register of the International Financial Services Commission (IFSC) of Belize:
When requesting a wire transfer, the name of another company is displayed – Insignia CO London Trading Index.
All indications are that the London Trading Index is not a legitimate broker, which is why you should avoid them. Instead, you can turn to one of the many companies that really work under the supervision of the Financial Conduct Authority. There are many advantages to working with an FCA regulated broker. Regulations in the UK include some important measures designed to improve investor protection and promote market integrity and transparency, such as segregated accounts and transaction reporting. All FCA regulated brokers participate in the Financial Services Compensation Scheme, and in case any of them goes bankrupt, clients can receive up to GBP 85,000 of their trading capital.
LONDONTRADINGINDEX TRADING SOFTWARE
London Trading Index uses the most common trading platform in the sector, MetaTrader 4 (MT4). The download links on the main website page do not work, and the name of the platform is misspelled as “Metatrade”, but the software can be downloaded after logging into the client portal. Here is what the platform looks like:
You can take a look at this list of legitimate brokers that do offer MT4 experience to their clients.
LONDONTRADINGINDEX TRADING CONDITIONS
London Trading Index’s website lists four types of accounts – Mini, Elite, Premium and even a “Islamic concept” which is in line with Sharia law and has no swap charges. The minimum deposit for the Mini account is GBP 1,000, which is significantly above the industry average. Legitimate brokers typically offer micro accounts with a minimum deposit of USD 100.
The proposed spread is closer to standard levels, between 1.5 and 2 pips. In the trading platform, the spread for a demo account is around 0.1 pips. This would be a very competitive level if London Trading Index was a legitimate broker.
Something that further proves that this is not a broker operating in the UK is the stated leverage – 1:200. The FCA restricts leverage for retail traders to 1:30, because although high leverage allows for greater profits, it also carries increased risk.
There is a menu in the customer portal to change the leverage, with the maximum level of 1:100, which again is higher than allowed in the UK. The same level is set in the trading platform.
The Terms and conditions also mention bonuses and promotions, which are another thing prohibited by the regulator.
LONDONTRADINGINDEX DEPOSIT/WITHDRAW METHODS AND FEES
London Trading Index’s website lists credit cards, wire transfer, Skrill, Neteller and Bitcoin as payment methods. However, the only active option in the deposit menu is the wire transfer – which is non-refundable. The system allows requesting any deposit amount.
The only fee specifically mentioned is that for an inactive account – USD 5 a month.
HOW DOES THE SCAM WORK
Scammers who promise easy money without any effort are nothing new, especially on the internet. But given the excitement around bitcoin and cryptocurrencies in recent years, malicious actors have run rampant more than ever, capitalizing not only on people’s desire to solve their financial woes with a magic wand, but also ignorance and misunderstanding of how blockchain and complex financial instruments actually work.
If your curiosity is stirred by one of the many flashy websites promising easy riches, and you provide your contacts, you will soon be contacted by skillful and persuasive scammers who will convince you to start with a relatively small and “risk-free” investment. If you agree to this, you will be transferred to even more skilled at convincing scammers, who will persuade you to invest even more. Any money you give to such people is money you are unlikely to get back.
Any attempt to withdraw deposits or alleged profits will be hampered by numerous and significant fees, as well as harsh and often prohibitive conditions written into the terms and conditions – such as high trading volume requirements, unexpected “taxes”, or withdrawal fees as high as 10% or even 20% of your funds.
WHAT TO DO WHEN SCAMMED
Recovering money you have given to fraudsters is difficult and often impossible. Fraudsters always want you to provide them with documents such as a copy of your ID and proof of address so that they can claim that it is a legitimate transaction, agreed voluntarily between both parties. If the transaction is made by credit or debit card, you can request a cashback and hope for the best, but transactions via wire transfer or cryptocurrencies are not refundable. It is important not to trust online offers from people who offer to recover your money in exchange for an upfront payment, because this is also a well-known scam.
