Beware! Honestum 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.
Honestum claims to be a top choice when it comes to forex trading and promises a high level of professionalism. This is not, however, a broker we would feel comfortable trusting. Honestum has lied both about being regulated by a few financial regulators and about providing a highly functional trading platform. Honesty definitely does not seem to be this company’s policy. They cannot promise safety and reliability and will surely try to rob you the moment you deposit.
Many legitimate brokers offer great trading conditions on top of a solid license. Check out their offers instead of your putting your trust in shady enterprises such as Honestum.
Honestum REGULATION AND SAFETY OF FUNDS
Honestum claims to be licensed by the UK financial regulator, the FCA, as well as by the SCB of the Bahamas. A quick register check proved, however, that this is in no way a regulated enterprise. The broker was not only not licensed by either the FCA or the SCB but it has also earned an official warning from the former.
Such a warning proves that the broker is not authorized to offer services and has not met the basic requirements the FCA has in place for brokers under its supervision. More often than not, brokers with such warnings on their names are running dangerous scam schemes – with such companies, you will have no guarantees and would not be entitled to the same protections as clients of legitimate, licensed brokers.
Honestum actually seems to be based in Hong Kong but, unsurprisingly, does not seem to be regulated by the Hong Kong Securities and Futures Commission (SFC) either. The broker is entirely unregulated which means that they surely present a danger to your investment.
Rather than wasting money on such questionable companies who have been created with the very aim to rob you, turn to a legitimate UK or EU broker. Such brokers have to meet many requirements before they obtain a license – they have to hold a minimum capital to prove that they are financially stable €730 000, and participate in compensation funds – if a broker becomes insolvent, its clients could demand compensation of up to £85 000 if the broker was regulated in the UK, and €20 000 if it is an EU- licensed broker. Client deposits must be kept in segregated accounts – so you can be sure your broker is not using your deposits for their own daily financial operations – and negative balance protection is ensured – you could never suffer losses exceeding the amount of money you have in your account.
The Hong Kong Securities and Futures Commission (SFC) is another fairly strict regulator. Hong Kong brokers are obligated to maintain a minimum capital of 5 million Hong Kong Dollars (or $640 000). They also have to participate in an Investor Compensation Fund that ensures the capital of clients that trade securities and futures contracts up to $150 000 in case of broker insolvency.
Trading with a regulated broker comes with many protections and perks. However, if you choose a broker like Honestum you can forget all about such safety measures. Nobody could guarantee that such a broker would treat you in a fair manner which is why depositing with them is a horrible idea.
Honestum TRADING SOFTWARE
Honestum promised access to MetaTrader 4 – one of the leading platforms in the world of trading. When we tried to download the platform through the download link the broker provided on its website, however, we ran into a problem. The software Honestum offered us to download did not seem like MT4 and came from an unverified publisher. This is suspicious, to say the least – we were not eager to install shady software that could contain all sorts of malware.
It seems like Honestum does not provide access to a functional MT4 but there are many legitimate brokers that do. This popular platform is very functional, as well as intuitive, and offers a variety of useful features. Clients would be able to use the platform’s own Expert Advisors to track markets and trade, create their own trading bots and indicators, purchase VPSs to keep EAs operating at all times, set signals or subscribe to those set by others, etc.
Honestum TRADING CONDITIONS
Honestum provided very few details about its trading conditions. This makes them seem even less legitimate – regulated brokers usually try to present themselves in the best possible light. They provide detailed account-type descriptions and offer plenty of details on trading instruments, bonuses, commissions, and leverage. These are not things Honestum gave a lot of if any, information about. The broker did not even mention what minimum deposit they ask for. Some of the most established companies in the industry offer affordable trading accounts. These days, you can start trading with as little as $10 – do not waste your time and money on scammers like Honestum.
The broker promised leverage as high as 1:100 which, again, proves that they could not be regulated in the UK. This is one of the countries that have imposed leverage restrictions. Retail clients would not be allowed to trade with rates higher than 1:30 on the least volatile asset, forex majors. The reason behind this leverage cap is that trading with such high rates could potentially result in enormous losses – especially for inexperienced new traders. Always be careful with your settings and only trade with rates you are sure you can handle. If you still want to trade with 1:100 leverage, turn to a broker that can offer you such rates legally.
Honestum DEPOSIT AND WITHDRAWAL METHODS AND FEES
Honestum chose not to disclose which deposit methods it accepts. However, we consider depositing with such a shady enterprise to be a terrible idea – you will most probably be left wondering how to get your money back. That is why the best protection is to not deposit at all.
If you have already transferred money to the broker, there might still be something you could do to get your money back. Both Visa and MasterCard, for example, allow chargebacks within 540 days of the transaction. Contact your card issuer as soon as possible to see how to get your money back.
However, since it is very easy to get a chargeback on a credit/debit card payment, most scam brokers choose to not offer this payment solution. They urge clients to deposit in crypto instead – such transactions are completely irreversible and fairly anonymous. Never transfer money in crypto unless you are 100% sure you can trust whoever you are transferring to.
HOW DOES THE SCAM WORK?
In recent years, such scams have become more frequent than you can imagine. That is why it is very important to learn how they usually work and how to tell scam brokers apart from legitimate ones.
Always make sure to check the registers of regulatory bodies to make sure that a broker is licensed and reliable. Stay away from shady-looking websites that promise enormous profits in no time with zero effort. Do your own research – never blindly trust what a certain broker is telling you.
All scams start in a fairly similar way. You see an ad on the Internet promising immense fortune in no time – the only thing you have to do is open an account with a particular forex broker. You give in to curiosity and provide the scammers with your phone number and e-mail – at this point, you might still be reluctant to deposit. But once the scammers have your contact information, you will start getting calls and messages from them. They will ask you to deposit to unlock the full potential of their platforms and turn a profit. Keep in mind that such people are well-versed in the art of sweet-talking – they can promise amazing things and make effortless profits seem possible.
After you make an initial deposit, they would not leave you alone and keep asking for more money. You might even be happy to deposit since, at this point, it might seem like you are turning a profit. Scammers tend to manipulate platforms and results to make it look like you are doing great when you are actually just pouring money into their schemes.
The moment you try to withdraw, you will find out that something is not quite right. Reasons why withdrawals are impossible will show up – additional taxes, new clauses in the broker’s Terms and Conditions, etc. At some point, you will figure out that you are being scammed – but it would already be too late. The scammers will stop answering your calls and e-mails – and they will simply disappear with all your deposits.
WHAT TO DO WHEN SCAMMED?
The first thing you should do is contact your bank and inform them about what has happened. Change your banking passwords to ensure that the scammers would have no way of stealing more money.
If you have installed remote access software – such as TeamViewer or AnyTesk – make sure to remove it. Some scam brokers will try to convince you that such software is necessary for a better trading experience – in order for them to help you with platform issues, or even with trading. Their true goal is to get access to your computer and banking systems – so they can start draining your accounts.
If you have deposited with a credit or debit card, make sure to contact your card issuer as soon as possible. Both Visa and MasterCard try to combat scams by allowing chargebacks within 540 days of the transactions. Retrieving your money might still be possible. If you have deposited in crypto, on the other hand, there would, unfortunately, be no way for you to get your money back.
Make sure to inform the authorities in your country about the broker and share your story – online and with acquaintances. This will prevent people from getting scammed in the same way.
One final important note – never trust anyone that calls themselves a “recovery agent”. Such “agents” promise to track down the scammers and retrieve your money – for a fee, of course. This is nothing more but another type of scam directed at desperate people.