Beware! Smart Direct Broker 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.
The Smart Direct Broker website promises us high quality and transparency from a regulated forex broker. But fact checking shows that Smart Direct Broker is not what it claims to be. This website has the sole purpose of scamming inexperienced people out of their money.
At the time of writing this review, Smart Direct Broker does not offer even basic functionality such as the ability to register a new account. But it would still be useful to look at the clues that this is not a legitimate financial services provider.
SMART DIRECT BROKER REGULATION AND SAFETY OF FUNDS
Legitimate forex brokers provide clear and detailed information about the legal entity that owns and operates them, where it is based, what licences it has and which regulators oversee its activities. Lack of such details or improper presentation of them are always a red flag that we are probably dealing with a scam.
Smart Direct Broker is completely anonymous – neither the website nor the text of the Terms and Conditions mention the name of the company that owns and operates this alleged broker. Therefore, we are certain that Smart Direct Broker is misleading by stating that it is based in the UK and holds a licence from the UK’s Financial Conduct Authority (FCA).
An anonymous website cannot operate as a provider of financial services in this highly regulated jurisdiction. A check of the FCA registry confirms that there is no authorised broker using the trade name and domain of the Smart Direct Broker.
Smart Direct Broker claims to be associated in some way with a company named Broker Direct Plc. This company exists and is licensed by the FCA but operates through a completely different domain. We have found no evidence that Smart Direct Broker is indeed affiliated with this company.
Furthermore, the trading parameters offered by the Smart Direct Broker are completely incompatible with UK regulatory norms, as we shall see later.
Before investing your money in financial instruments, it is imperative to make sure you do so through a licensed intermediary and not one of the many scammers lurking online.
If you want to trade on financial markets without being scammed, you can turn to some of the legitimate brokers that actually operate from established financial hubs like the UK. These brokers have to meet stringent requirements for financial stability and transparency of operations imposed by the FCA.
They must provide clients with negative balance protection and to participate in a guarantee fund that covers up to GBP 85,000 of a client’s investment should the broker go into insolvency. These brokers are also required to keep their clients’ money segregated from their own operating funds in separate bank accounts.
SMART DIRECT BROKER TRADING SOFTWARE
Smart Direct Broker claims to offer a web-based trading platform. But as stated, at the time of writing this review it was not possible to register a new account. Therefore, we were unable to confirm whether Smart Direct Broker does indeed have trading software.
It should be noted that the presence of some kind of trading software is no guarantee that this is a genuine broker. Financial scammers often use rigged 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.
If you use the services of a licensed broker, you will get the opportunity to use established software with advanced features and versions for all types of devices and operating systems. The most widely used trading platforms in the industry are MetaTrader 4 (MT4) and MetaTrader 5 (MT5).
These platforms have established themselves as industry standard because they offer a wide range of features, including a variety of options for customization, multiple account usage, designing and implementing custom scripts for automated trading and backtesting trade strategies.
SMART DIRECT BROKER TRADING CONDITIONS
On the Smart Direct Broker website, we see a description of five types of trading accounts. These parameters provide us with further evidence that Smart Direct Broker could not really be a licensed broker based in the UK.
The first such evidence is the high leverage of up to 1:200 indicated. High leverage creates the opportunity for more significant profit, but correspondingly increases the risk of sudden and excessive losses. All leading regulators therefore restrict leverage for retail traders.
The FCA, like EU regulators, limits leverage to 1:30 for trading in major currency pairs and even lower levels for more volatile assets.
Smart Direct Broker also promises various bonuses and promotions. Regulated brokers are prohibited from offering bonuses and promotions. Scammers often use promises of supposedly generous bonuses to tie their potential victims to extortionate terms.
If you are nevertheless willing to take the risk of high-leverage trading and want to take advantage of bonuses, promotions and prize games, the best option is to use the services of offshore brokers operating under an established brand.
The minimum deposit required by Smart Direct Broker is 250 USD. For the same amount you could open a starter account with almost any licensed broker. Many leading brokers offer Micro accounts to beginner investors with even lower minimum deposits.
SMART DIRECT BROKER DEPOSIT/WITHDRAW METHODS AND FEES
The logos of popular payment methods such as Visa, MasterCard, WebMoney, PayPal and QIWI can be seen on the homepage of the website. But we had no way of finding out what payment methods Smart Direct Broker actually offers.
Experience with scams of this type has shown that fraudsters direct their potential victims to payment methods that do not allow refunds or chargebacks, most commonly cryptocurrencies. If you’re interested in legitimate brokers that accept digital currency payments alongside conventional methods, check out this list.
Smart Direct Broker does not provide clear information on deposit and withdrawal fees. If an account has received a bonus, it can only withdraw funds after meeting extremely high minimum trading volume requirements – 10,000 times the bonus amount.
HOW DOES THE SCAM WORKS
It is tempting to be lured by the promises of easy money that we constantly come across on the internet. But behind the vast majority of these promises, if not all, are scammers. In recent years, many fraudulent schemes have consisted of websites posing as brokers and trying to cash in on the excitement surrounding cryptocurrencies.
If you give your contacts to one of these scammers, they will start convincing you that they will multiply your money, with nothing required of you but to sit back and take profits. If you agree to an initial investment of a few hundred dollars, they will start persuading you to invest more and more.
But you will never get the promised profits or the money you deposited. Scammers have many ways to ensure this. First of all, they are hidden behind offshore companies, not subject to controls and regulations. For the money transfers they use shady payment platforms, direct bank transfers or cryptocurrencies that make recovering money very difficult and often impossible. The terms and conditions are always riddled with traps that also block your ability to withdraw your money, such as prohibitively high minimum trading volume requirements or withdrawal fees amounting to tens of percentages of your funds.
WHAT TO DO WHEN SCAMMED
When you find yourself scammed and seek advice and help online, you are likely to receive offers from individuals and companies who promise to refund your money for a fee that you have to pay in advance. Don’t trust such offers or recommendations from anonymous commentators on the internet – this is also a well established scam.
The best chance to get at least some of your money back is to request a chargeback, but this applies only if the transfer is made via credit card. It is of course advisable to notify the relevant authorities of the fraudsters’ activities and to spread the word online to warn other people who may fall victim to the same scammers.
