Can I get my money back from a broker?

Hello, colleagues and trading friends!

There are many useful articles on our website about the rules and methods of trading Forex and binary options. But sometimes an unpleasant situation arises when a broker “zeroes an account” of a client. At the same time, communication with the Support Service does not lead to clarity and it seems that the money is gone and lost irretrievably.

Despite the fact that financial service provider companies are under the supervision of financial regulators, guaranteeing clients the protection of invested funds, the preparation of a complaint is costly and not always a promising process. From the position of legal rights, the trader will have to figure everything out in place of the company registration.

What can be done if you are in such a situation, in particular in the about the Chargeback procedure from Visa and Mastercard - in our material.

What is the most effective way to get money back?

In reality, fraudsters in the Forex market and binary options can be prepared for a scam, using the peculiarities of local legislation, the casuistry of the proposed agreements and offer agreements with the user. This allows the trader to deprive the listed deposit or profit.

Some of them are“clean scams” - companies created to get a certain amount of funds, after which the legal entity is closed and the founders disappear.

Over the 20 years of the existence of the financial services market provided by brokers on the Internet, complaints about the non-payment of money affected both popular brands and unknown companies, firms with “reliable” US licenses and firms with certificates of countries that are not immediately detectable on the map.

Traders tried in various ways to “fight” for stolen, in their opinion, funds, including hiring lawyers and lawsuits on offshore “paradise islands”. The only effective option for the return of the deposit was the chargeback procedure - cancellation of the payment provided for by the rules of international payment systems.

Return of funds transferred to the broker under the Chargeback procedure - expectations vs reality

To simplify the lives of customers and to make non-cash retail mutual settlements safe, Visa and Mastercard have invented a procedure for protesting and returning funds from dishonest vendors or service providers, including financial ones.

• Good news for traders - the burden of proving rightness falls on the broker;
• Bad news: the local bank determines the chargeback rules, the limitation period extends to the payment, money is returned only in the amount of the transfer (just forget about paying the profit).

Theoretically, a trader who discovered at some point an “unfair zero” on the account writes an application to broker in the bank, indicating the dates and amounts of the transfer of payments. He appeals to the local branch of the acquiring bank, which deducts these funds from the company’s current account.

In practice, it is enough for the broker to bring a copy of the contract, pointing to the “Risks” section and the litigation will be completed in his favor.

It should be understood that by depriving a trader of a deposit, the fraudulent company risks permanently losing the possibility of servicing in Visa and Mastercard - for this, it is necessary that the number of Chargeback operations exceed 2%. Therefore, the theft of funds takes place according to pre-rolled schemes, where the “complainant” will be in a losing position:

• Use in the transfer scheme of legal intermediaries who transfer client funds to a broker under processing agreements. In this case, a refund is possible only if they did not get to the broker;
• Transfer of funds through the mediation of legal payment electronic systems;
• Liquidation of a legal entity or withdrawal of assets from a current account.

The Chargeback procedure does not provide for the liability of third parties, therefore the lack of a proven connection of the broker with the payment e-wallet will automatically make senseless the procedure for claiming a lost deposit. In the case of timely client money delivery to the broker, there are no claims to the payment system.

Return of funds stolen by a broker is relatively simple in the following cases:

• Non-payment of income on broker’s investment instruments;
• Refusal to return a deposit that was not involved in transactions.

Problems with the return of funds due to a broker offer

A trader can get an access to trading on the Forex market by signing the Agreement or acceding to the offer - the broker’s standard conditions. Inattentive study of trading conditions can deprive a trader of funds and the right to return them if:

• The client has lost money as a result of the forced closing of positions, as they have reached the stop out level;
• Missed the deadline for appealing the loss due to the spike - technical lining, which led to the transmission of non-existent rates;
• The loss appeared due to the nuances of structural products (for example, they were converted into national currency and the money was lost as a result of a crisis);
• Loss of funds due to penalties for improper account deposit (for example, frequent withdrawals and deposits without commissions);
• Charging of profits due to the high frequency of transactions.

Therefore, before proceeding with the Chargeback operation, carefully study the reasonable response of the Support Service, which usually contains clauses of the Contract or an offer. Take into account the fact of your prior consent to these conditions, because the broker will provide exactly the same reasons to the acquiring bank.

Chargeback money transfer scheme from a bank card

Each bank has its own chargeback algorithm and a strategy developed over the years to deal with various cases. The Security Service mainly deals with returns, which will meet the client’s complaint about the store, but will return the claim with text like“I lost money on Forex (binary options)”.

The first thing that a victim should learn is that he was a victim of improperly provided financial services. Try to learn the rules for returning the selected payment system and find a suitable description in advance in chargeback codes on Mastercard and Visa. It is this wording that will be presented to the broker by the acquiring bank when the application is registered by the card issuing bank.

Despite the fact that, in theory, the broker is obliged to prove his innocence - before contacting the bank that issued the card, prepare a package of evidence.

In addition to the list of documents listed in the bank’s instructions (if any), support the complaint with screenshots of correspondence with the company with a refusal to withdraw the deposit. Also, prepare a copy of the Agreement (download from the website), try to find items that prove the broker’s wrongness, if there aren’t, simply point to the section “Company Responsibilities” and “Client Rights”.

When preparing a package of documents, do not forget about the statute of limitations with a chargeback of 540 days from the date of the transaction. Remember: the initial decision to start the procedure is made by a local bank. Visa and Mastercard enter into the dispute only as arbitrators, but they will not spoil the relationship with the financial institution.

If the bank accepted the claim, then the second stage begins - proceedings between the acquiring bank and the broker. This is a long process, as the company will have time to collect evidence and appeal, in case of a positive decision in the direction of the client-applicant.

In case of refusal, the trader will be provided with an official response and evidence of the argument, after which he can, theoretically, finding new circumstances, submit a complaint again.

Chargeback paradoxes

As can be seen from the above scheme, in the decision on the return of funds a large role is played by the conclusions made by the card issuing banks and acquirers conducting payments. Such companies are guided solely by their own ideas about the weight of the arguments of the parties.

This leads to paradoxes, sometimes interpreted in favor of the broker, but customers who filed for a refund can receive 100% of the transfers, even if the money was lost through their fault.

Brokers must prove that the services were provided under the contract in full, but the acquirer may take the side of the trader in the case of unconvincing arguments saying that the tick placed by the trader is a signature, or in the case of its absence, the evidence of actual transactions.

Another problem when brokers prove that they are right is the “kitchen” business format. If the client was not given the opportunity of real, competitive bidding, and the funds were simply charged and did not go to the auctions (this is especially true for binary options), the trader will get back all the money he spent during the last 540 days.

If you are trying to make a refund on “someone else’s advice,” remember that decisions in banks depend on specific people, so the same financial institution can make different decisions on identical cases, or not accept an identical statement and the past before that, all stages of chargeback.

The market of chargeback services - money back from a broker

From the description of the money-back mechanism from a fraud broker, it can be seen that the success of claims directly depends on the ability to legally defend one’s case or have connections in banking structures. Therefore, a service market has emerged around the target back procedure applied to brokers, where companies and individuals are ready to help traders recover money.

One of the features of the work of such services is the prepayment and high commissions, reaching up to 30% of the amount transferred, retained or withdrawn by the broker.

Before you rush onto the first company in the hope of returning lost, if you are offered to return money from a broker, you should understand:

• Appeal to intermediaries will not get you rid of the collection of initial evidence of fraud;
• The company will help “promote” the application to the issuing bank and prepare a package of documents, but will never guarantee a 100% result, since the main decision on chargeback is taken by the EQB;
• If the funds are transferred through an intermediary (in the recipient’s details, an individual or a settlement payment service, etc., but no clear data of the broker is indicated) - the money cannot be returned;
• If the brokerage company is bankrupt, the prepayment to the intermediary will “burn out”.

There is a lot of advertising on the Internet about the help to get back the money from brokers, but you should choose an intermediary according to the same principles as you should have chosen a Forex company:

• The legal entity must be registered in the client’s national jurisdiction (can be checked in the registry);
• The absence of 100% promises, partial prepayment;
• Specialization – the lawyer should deal with chargeback issues closely and constantly.

Most companies in the first lines of search results (as well as in Google.Adwords advertising) have an ambiguous reputation for the return of funds. This may be due both to real situations of cases delay (the fact of their contacting the bank cannot be verified) or to the unpredictability of the outcome of the case.

As a result, for every positive feedback, there are examples when the prepayment is paid, but the issue has not been resolved.

Beware of the options of “free work” without prepayment, such offices in the process will be asked to issue a power of attorney from the trader and will appropriate the funds received. A variant of the allegedly successful transfer to a foreign account, which will be opened remotely, is also common. Fraudsters will demand payment for the work, pointing to the allegedly received money in the account, which the “bank representative” will inform the trader about.

Avoid “helpful calls” from people who are aware of the problem of non-payment of a deposit - this is 90% of the cases a scam of affiliated companies who plan to cash in on the victim in the second round. As a rule, these companies can be registered in a single offshore jurisdiction, a fact that attackers will represent as an additional advantage.

How to protect yourself from forex broker fraud?

A large number of scams and losses of deposits in the Forex market happened in 2014. The situation has reached such a stage that it reached the first pages of the national mass media.

A positive effect from the past hype became the articles in the state press on how to choose the right broker and the selection of ratings of reliable companies that provide services in the Forex market.

The advice is quite simple - companies whose brand has been present on the international financial services market for decades will not seek to take the trader‘s deposit. This may result in loss of reputation for them or serious problems that will make the government want to prevent situations happened in 2014.

Petty fraudsters or backyard firms without gaining their income can go “all bad”, even if a scam was not intended at the creation stage. Therefore, when choosing a company, pay attention to the so-called white list of reliable brokers.

Conclusion

Starting to work in the Forex market, the majority sees only future advantages but does not evaluate the risks. Always work on the formula - “The risk should not lead to strong emotional consequences, you shouldn‘t be sorry of the lost investment amount.”

Read everything you sign or agree to on a collective or public offer. Remember: having saved time on studying legal nuances and checking the validity of a broker’s business now - you will have to spend a lot of energy and emotions later, studying the documentation and ways to recover lost funds from a fraud broker.

Be wary of calls from unknown numbers - methods of verbal influences, due to which 70% of frauds occur, including coercion to open an account in an unknown broker.

The conductor of this evil is the telephone and the calls of intruders, urging “to open an account without risk.” Do not think that you can withstand psychological tricks that are being improved day by day - just do not answer a call from an unknown number or hang up, actively use the “blacklist” function in your phone. You can also search the caller’s number on the Internet - now there are a lot of websites in the network where there are comments from people who called from certain numbers. If there are some negative reviews (financial scammers, golden mountains, and so on), there is no point in responding to such a call.

Regards, Michael

ForexTraderPortal.com