Beware! Finowiz 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.
Finowiz wants us to believe that it is a multi-award winning broker, offering effortless trading in forex, indices, commodities, bonds and cryptocurrencies. However, closer inspection shows that this website is full of false and misleading information. There’s no good reason to trust Finowiz with your money because this is obviously a scam. Let’s see exactly why this is the case.
FINOWIZ REGULATION AND SAFETY OF FUNDS
It is not clear from the home page of the website which company owns and operates this alleged broker and where it is based. This in itself is a big red flag – legitimate brokers present this information prominently.
The next telling clue is the Finowiz’ legal documentation, which amounts to a few ordinary Microsoft Word files. Not only the form meets the standards, but also the content – the Terms and Conditions are quite vague and insubstantial. The only specific information in the text is that a company called Finowiz Fintech Limited is behind Finowiz.
The “Contact Us” section lists an address in the Saint Vincent and the Grenadines (SVG):
But the registration details of the trading platform used by the Finowiz state that the company is based in Seychelles:
In both cases, these are offshore areas where there are no regulations for brokers. Companies that are registered there do not have to meet any standards and provide no guarantees for their clients’ funds. But Finowiz is not listed in the databases of either the inancial Services Authority of St. Vincent and the Grenadines or the Seychelles Financial Services Authority. There is no evidence that this company even exists. It would be an unjustified mistake to trust your money to an anonymous website.
Under no circumstances should you trust your money to such anonymous websites full of false and contradictory information. Instead, you can turn to one of the many companies that really work under the supervision of respected regulatory bodies like Cyprus Securities and Exchange Commission (CySEC) or Financial Conduct Authority (FCA) in the UK. As their customer you will enjoy a number of guarantees including negative balance protection and guarantee for your funds if the broker goes bankrupt, which goes up to EUR 20,000 in EU and 85,000 GBP in the UK. Regulations in the UK and EU include some important measures designed to improve investor protection and promote market integrity and transparency, such as transaction reporting. Regulated brokers are also required to segregate their operational funds from the client’s money.
FINOWIZ TRADING SOFTWARE
Financial scammers often use trading platforms to fool their victims that their money is actually being invested. However, this trading is entirely fictitious and the money goes directly into the scammers’ pockets. This is also the case with Finowiz, which uses MetaTrader 5 (MT5) – currently the most popular platform among brokers worldwide. Registering a live account requires identity verification, which is why we were only able to test the software with a Demo Account:
You could always use the services of a regulated broker, the vast majority of which offer clients MT5 or the still very popular MT4. This will enable you to use the advanced features of these platforms without fear of being scammed. These platforms are preferred by the majority of brokers around the world because of their powerful automated trading capabilities, including Expert Advisor bots and customized scripts for backtesting trading strategies.
FINOWIZ TRADING CONDITIONS
The descriptions of the terms of trade that Finowiz pretends to offer are sketchy and contradictory. The homepage states that the minimum deposit is 20 USD, while the descriptions of the four types of trading accounts state an amount of 10 USD. It would certainly be a better choice to use the services of a licensed broker, some of which allow you to start trading with equally low amounts.
Leverage for all account types reaches 1:500. This is not a level that you see with regulated brokers. Trading with high leverage allows higher profits, but also increases the risk of sudden and excessive losses proportionally. All leading regulators limit leverage for retail traders. In the EU, UK and Australia the maximum permitted level is 1:30 and in the US it is 1:50. This maximum level only applies to trading major currency pairs, with even more limited leverage for more volatile assets.
Different account types offer a spread starting at 2 pips or zero spread and a commission of 10 USD per lot, presumably per side. These are not at all competitive and advantageous levels, even assuming Finowiz offers real trading.
FINOWIZ DEPOSIT/WITHDRAW METHODS AND FEES
There is no indication on the Finowiz website what payment methods are used. The deposit menu is not available if the account is not verified. Legitimate brokers typically offer clients a wide choice of transparent payment methods, including bank transfer, credit/debit cards and established e-wallets such as PayPal, QIWI, UnionPay or Neteller. Scammers prefer cryptocurrencies because these transactions are not subject to refunds. Finowiz has written in its Terms and Conditions that it does not allow refunds, which is unacceptable for any legitimate business.
HOW DOES THE SCAM WORK
The hype surrounding cryptocurrencies has drawn public attention to the trading of financial instruments. However, the vast majority of people remain ignorant about financial markets. There are a growing number of scammers who are taking advantage of this by posing as brokers.
If you make contact with any of these sites that promise to make you rich effortlessly, they will first start convincing you to make a small “investment” of a few hundred dollars. If you prove susceptible, even more convincing scam artists will court you to give them even more money. They will probably even fool you into thinking that your initial investment has already generated profits.
But the truth is that your money will never be truly invested. It will go straight into the pockets of the crooks and you will probably never see it again. Scammers hide behind fake and offshore companies that are not subject to any regulation and control. They also often use non-transparent payment methods that make it difficult to track them and recover money. Your attempts to withdraw your supposed profits or deposit will be blocked by confusing clauses in the Terms and Conditions, prohibitively high volume requirements and huge withdrawal fees.
WHAT TO DO WHEN SCAMMED
Unfortunately, it is difficult to recover money given to such scammers. If credit or debit cards were used for the transfer, there is a chance if you ask for a chargeback. Visa and MasterCard allow this to be done within 540 days. But this method is not foolproof either, because fraudsters will ask you for copies of your ID and proof of address right from the start. This way they can claim to the card company that the transfer was voluntary and agreed by both parties.
It is important not to trust offers from people on the internet to recover your money from scammers for a fee. Such offers also come from scammers.
