FXMagna Review – 5 things you should know about fxmagna.com

FXMagna Review – 5 things you should know about fxmagna.com

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

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At a first glance, FXMagna looks like a pretty legit broker. The website looks pretty good, almost trendy, the company offers renowned and well-functioning trading platforms and tempting conditions. Looks can be deceiving though and if you spend a little more time looking at the website and reading through those tempting conditions, you will find a scammer like any other – presenting you with vague, contradictory terms and laughable attempts to disguise the fact that you cannot turn any profit with them. On the contrary, you will most certainly end up lied to and trying to get your money back. But it is better to save yourself time and just avoid these scammers at all costs.

FXMagna REGULATION AND SAFETY OF FUNDS

Supposedly, FXMagna is registered and regulated in the UK – their address and phone number are both there. The financial authority that regulates them, however, is not exactly trustworthy.

We had never heard of a regulator called Lebrn.com as the official regulatory body for the UK is the FCA (Financial Conduct Authority). It is laughable to suggest that an organization dealing with huge amounts of money could be regulated not by a government authority but by a website that was probably created exactly with the aim to provide cover for scammers. Throwing around registration numbers that are included in the database of a website does not equal a license under the strict supervision of a financial authority. Lebrn.com did not have a lot to say about the way they regulate or their mechanisms.

The FCA register on the other hand did not show any results for a company with that name.

Working with an unlicensed broker that has the audacity to lie about being regulated is a complete no-go. Actual UK brokers have to follow some of the strictest laws in the world. Those rules are imposed by a financial body – the FCA – that actually observes closely if brokers abide by the law. If they don’t, they risk losing their license and the right to operate on UK ground. For a company to offer such financial services in the UK, it has to maintain capital of at least €730 000. The reason for that is that the broker has to prove they are well-provisioned enough to survive on the financial markets which are famous for their volatility. Another important factor is the existence of compensation funds – if a licensed UK broker goes under, their clients could claim compensation of up to £85 000. All brokers are obligated to pay a regular fee to supply those funds with capital. With licensed brokers you can count on transparency you simply cannot discover when dealing with scammers.

FXMagna TRADING SOFTWARE

FXMagna gives access to two trading platforms – MetaTrader 5 and WebTrader. MT5 does not need an introduction – it is a great trading platform that offers many functions – access to a huge trading community, for example, where you can find and use other people`s trading bots or subscribe to successful traders` signals for a small monthly fee. You should definitely explore all functions yourself but know that there are enough legitimate brokers that offer MT5. Here is what a typical terminal looks like:

FXMagna`s WebTrader was actually quite decent although lacking in functionality when compared to MT5. The platform was easy-to-use but we could not get access to staple MT features like Expert Advisors and VPSs, to name just a few. And besides, it does not matter how decent the platforms themselves are if the broker is a full-on scammer. Still, this is what the WebTrader looked like:

FXMagna TRADING CONDITIONS

FXMagna is here to offer you the choice between four account types curiously named Gallileo, Newton, Einstein and Michelangelo. Deposits start from $1000 which is four times what a legit broker would usually ask of you. Deposits for beginner accounts could reach $250 but there are enough brokers that would set up an account for as little as $10.

FXMagna also advertises a 0.2 pips fixed spread. The spread on both platforms was actually even tighter – between 0.0 and 0.1 pips for EURUSD. These are indeed tempting conditions considering the average for the industry is 1.5 pips. But such scammers just use those thigh spreads as bate for inexperienced traders – this is not hard to fabricate and you will probably start turning a profit in no time. How much of that profit would be real and how much of it FXMagna would have assigned to your account to make you think you are doing well and invest more, is not clear.

The leverage the broker offers is between 1:100 and 1:1000 – too high for a broker that claims to be regulated in the UK. There, you will find licensed brokers offering leverage of 1:30 – which is the maximum permitted by the law. Higher leverage is only available to professional clients – the ones that fulfill two of the following three conditions – those who hold capital of at least €500 000,  have placed at least 10 big trading orders in the last year, or have worked in the finance for at least a year. Retail clients can only benefit from lower leverage rates – although high leverage can lead to bigger profits, it also holds the possibility of huge losses. And when you don`t have the experience to navigate the markets yet, it will most likely result in the latter.

FXMagna DEPOSIT/WITHDRAWAL METHODS AND FEES

The broker offers the usual deposit and withdrawal methods – credit and debit card and bank transfer. However, it is far from advisable to invest any money with those scammers.

Another proof that FXMagna is not a regulated broker is that they offer two types of bonuses – a 40% welcome bonus and a 25% bring-a-friend bonus. But there were some interesting clauses in their Terms and Conditions regarding those bonuses:

 

If you have registered a basic $1000 account you would supposedly be receiving a 40% ($400) bonus. A trading volume of 25 times your deposit and the bonus would be $35 000 which is definitely too much.

The broker also imposes an inactivity fee – 10% every month after six months of inactivity. While inactivity fees are not uncommon in the industry, this one is way too hefty.

In addition, FXMagna has an interesting procedure when it comes to withdrawals – if you have not executed a turnover of at least 200 times your starting deposit,  you will be charged 10% of the withdrawn amount as fee. This is probably done to ensure you don`t draw out your money too quickly and so that your time to ask for chargeback runs out in the meantime.

 

HOW DOES THE SCAM WORK?

It does not take a genius to design such a scam but they are surprisingly effective.

What usually happens is that you see an ad for a broker while scrolling on the Internet and get tempted by the opportunity to make some quick and easy money. The scammers` websites will show you pictures from the luxurious lifestyle you want to be leading and drown you in satisfied clients` testimonials. In reality, none of the promises you get would turn out to be true.

Once you have provided scammers with your contact details, the game is afoot. You will start getting calls and emails asking you to make a deposit. Soon enough you will have an account open, usually under incredibly good conditions, and you will probably be making money too. That is what the scammers want you to believe anyway – so you would invest even more money.

The problems start when you start trying to make a withdrawal. There will usually be some sort of complication preventing you from doing so like more and more additional fees and more and more waiting periods. The moment you start figuring out that something is not as it should be, the scammers will stop returning your calls and will disappear into the blue.

WHAT TO DO IF SCAMMED?

The most important thing now is to remain rational and not trust any “recovery agents” promising to retrieve your money for a small fee. This is just another type of scam, sometimes performed by the same people that ran off with your money in the first place.

What you should do is contact your bank or card provider and ask for assistance. If you were using a credit or debit card, you can file for chargeback within 540 days. Sometimes, if you have verified your account with the scammers by sending them a picture of your face and ID, they will use that to prove that you were indeed their client and invested voluntarily. In such cases, retrieving your money would be pretty impossible.

Make sure to change any passwords you gave the scammers access to. Contact authorities and share your story with your friends and acquaintances. Post about it on the Internet. The more people know about these types of scams, the harder it will be for scammers to lure in unsuspecting victims.

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