Beware! CostaMarkets 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.
CostaMarkets is a scam broker who is definitely not regulated but is trying hard to convince you of the contrary. Opening an account with the broker is not possible at the present moment – which is good news for all of its potential victims. The lies CostaMarkets are quite elaborate – but you should not believe any of the broker’s claims. Read the review below to find out more.
CostaMarkets REGULATION AND SAFETY OF FUNDS
CostaMarkets claims to be registered in both the UK and Australia and licensed by the Australian Securities and Exchanges Commission (ASIC) – a respected and well-known regulator.
However, we were suspicious of such claims – the broker’s whole presentation reeks of a scam. The leverage CostaMarkets offers is far higher than that any legitimate Australian broker could legally offer and the legal documentation we were provided with was brief and uncomprehensive. So we checked the ASIC register for ourselves.
What we found out is that such a company was indeed regulated by ASIC but was deregistered in 2009.
This makes us suspect that this broker is using a name of a formerly ASIC-licensed company. At any rate, this is not a reliable broker you can trust with your hard-earned money.
Australian brokers are actually some of the most reliable in the world – as long as they are actually ASIC-regulated. The requirements they have to meet are pretty much similar to those brokers in other strict jurisdictions like the EU and the UK have to face. Aussie brokers have to maintain a minimum capital of A$1 million to prove their financial stability and keep client money in segregated bank accounts to promote transparency and protect client funds in cases of unfortunate events. Negative balance protection is also provided – which means you cannot lose more money than you have in your account. The only real difference between Australia, and the EU and the UK is the lack of compensation funds. All the other vital protections are there.
CostaMarkets TRADING SOFTWARE
CostaMarkets allows clients to download one of the most powerful trading platforms in existence – MetaTrader 5 – from its website. However, we were not provided with any sort of logging-in details – a password and account number – and could not log in to the broker’s client area. We kept getting the following message:
As a result, we could not see what the broker had to offer and would have to believe the information they provided on the website.
MT5 is a great platform offered by many reliable brokers – turn to one of them instead. This software is both accessible and efficient and offers a wide variety of tools and features. MT5 provides access to a variety of technical indicators, timeframes, and chart types, tools like Expert Advisors that track markets and trade automatically as well as the possibility to create your own trading bots and indicators, VPSs you could purchase to keep EAs operating even when your computer is off, multi-threaded, multi-currency Strategy Testers, the chance to set signals for prices going up or down, or to subscribe to those set by others for a small monthly fee, a market for add-ons, a community chat, a built-in economic calendar and much more.
CostaMarkets TRADING CONDITIONS
CostaMarkets asks for $100 in order to open its Standard account. This is pretty much in line with what most legitimate brokers would ask for these days – there are, however, more trustworthy brokers who would open an account for less money.
The leverage the broker offers varies depending on your account type but could reach 1:500 on forex major on CostaMarkets’ Standard account. This proves with absolute certainty that the broker could not be regulated either in the UK or in Australia – since brokers in both jurisdictions are not allowed to offer ratios higher than 1:30 to retail clients. Leverage could turn out to be a useful tool if you are an experienced trader willing to risk some capital – and trading with higher leverage could lead to decent profits. However, we would recommend novice traders to be careful – leverage enables you to make bigger offers which means that you could also lose far more money. At any rate, this broker could not legally be offering the leverage it claims to offer – so be wary.
CostaMarkets DEPOSIT/WITHDRAWAL METHODS AND FEES
Since we were unable to log in to the account we created with the broker, we were also unable to establish if all the payment methods it claims to offer are available. Clients supposedly have a variety of payment methods at their disposal – MasterCard, wire transfer, Skrill, PerfectMoney, local Indian and Pakistanian payment solutions as well as various cryptocurrencies. There are supposedly no deposit or withdrawal fees. However, we would advise you against depositing with CostaMarkets – they are nothing more than an insolent scam trying to rob you.
The broker’s Terms and Conditions were only 7 pages long and did not feature any information about additional non-trading fees or commission. The legal documentation was overall disappointing and provided very little information about the way CostaMarkets conducts business – you will be able to read about some more general topics such as handling of personal information or user registration and that is all.
HOW DOES THE SCAM WORK?
Scam brokers are becoming more and more of a constant feature in the world of financial frauds – which means that more and more people are losing their hard-earned money by depositing it with such unreliable companies. We advise readers to always turn to licensed enterprises and thoroughly check registers. Let’s take a look at how such scams usually work and how you can protect yourself from them.
You stumble upon a broker who seems to offer fast, effortless, sometimes guaranteed profits – and decide that there is no harm in opening an account with it to see what it has to offer. After all, you have heard stories of people earning a decent income by trading – why not be one of them. You would not have to deposit, not immediately. But the moment you provide the broker with your phone or email, they would not leave you alone before you do so. You will be promised all sorts of great things – after all, these are people who scam people for a living and who are well-accustomed to convincing. The initial deposit might not be big – but you would be asked for more and more money with time. In some cases, you might even see that money grow – but that is nothing more than a trick that usually involves some sort of platform manipulation.
A time will come though when you will want to withdraw money – and you would not be allowed to do so. The broker will claim that you have not fulfilled a clause in the Terms and Conditions, that there are additional taxes, and that you are obligated to wait a certain time before withdrawing. At this point, you will understand that you are being scammed – but the broker will disappear as soon as they discover they can no longer milk you.
WHAT TO DO WHEN SCAMMED?
The first thing you should do is change all your banking passwords, and uninstall any remote access software (if you have installed any). After all, you would not want the scammers to have any sort of access to your bank account so they could drain it.
Do not trust any so-called “recovery agencies” who ask you to pay a fee so they could track down the broker and retrieve your money – this is a whole other type of scam targeting desperate people. What you should do instead is inform the actual financial authorities, and look into chargeback options – both Visa and MasterCard, for example, battle scams by allowing chargebacks within 540 days of the transaction.
One final thing – it is important to share your story with as many people as possible. The more people know about this sort of scam, the fewer people will fall victim to it. Unfortunately, such stories rarely get a happy ending – which is why prevention is key.