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

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Theactivetrade.com is an example of something we encounter relatively often – a new reincarnation of a fraudulent scheme we’ve reviewed in the past – theactivetraders.com. But since the Theactivetrade.com website is active and has come into the sights of financial regulators, it is worth reviewing the clues that implicate it as a scam.

THEACTIVETRADE.COM REGULATION AND SAFETY OF FUNDS

If a financial services provider is legitimate, you will find on its website clear and detailed information about the company that owns and operates it, where it is based, and what licences it has. Genuine brokers also provide access to a comprehensive set of legal documentation.

The availability of such information does not guarantee that it is not false or misleading. But the absence of these elements is very indicative that in all likelihood you are dealing with scammers.

We don’t see a company name or contact address on the Theactivetrade.com homepage. That in itself is a red flag.

The beginning of the text of the Terms and Conditions states that the company behind this broker is called Active Traders LTD and is based in the United Kingdom.

But no such company can be found among the brokers licensed by the UK’s Financial Conduct Authority (FCA).

In addition, later in the document it is stated that the applicable jurisdiction is in fact that of Dominica. This is an offshore area where there are no significant regulations on the activities of forex brokers.

The only thing we can say for sure about Theactivetrade.com is that it is not a licensed and regulated broker. The Italian financial regulator CONSOB confirms our suspicions that  Theactivetrade.com is a fraud:

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.

THEACTIVETRADE.COM TRADING SOFTWARE

Theactivetrade.com employs a basic web-based trading platform as we have seen with many other fake brokers. Here’s what it looks like:

While this platform has the basic functionality to place orders, it cannot compare to the capabilities provided by MetaTrader 4 (MT4) and MetaTrader 5 (MT5). It is no coincidence that these platforms have established themselves as the industry standard. 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.

It should be noted that the presence of a trading platform does not make this website any more legitimate and does not guarantee that this alleged broker offers real trading. Many scammers use rigged trading software to fool their victims that their money is being invested.

THEACTIVETRADE.COM TRADING CONDITIONS

When you visit the website of a legitimate broker you will find proposals for different types of trading accounts suitable for investors with different preferences, as well as detailed descriptions of trading parameters – minimum deposit, order execution method, tradable financial instruments, leverage, spread, swap, commissions, etc.

The descriptions of the accounts offered by Theactivetrade.com specify only one parameter – a minimum deposit of 300 EUR. For a significantly lower amount you could open a starter account with a licensed and well-established forex broker.

After registering an account we get the option to choose a leverage level up to 1:1000.

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.

Regulated brokers offer higher leverage only to professional clients who must meet very high standards for capital and experience and forgo the guarantees enjoyed by retail traders.

If you don’t qualify as a professional trader but are willing to take the risk of high-leverage trading, the most viable option is to use the services of an offshore affiliate of an established brand.

THEACTIVETRADE.COM DEPOSIT/WITHDRAW METHODS AND FEES

At the time of writing this review, there were no active options on the Theactivetrade.com deposit menu.

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.

While there are some legitimate brokers that accept digital currencies like Bitcoin, they do so alongside other transparent payment methods such as credit/debit card, bank transfer or popular e-wallets like PayPal, Neteller or Skrill.

Theactivetrade.com states that it charges a fee of 3% of the deposited money if the account makes a withdrawal without any trading activity.

The Terms and Conditions also mention a vaguely defined ” Administration Fee” of 10% of the account balance. Legitimate brokers do not charge such fees.

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.

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