Find out how unauthorised forex trading and brokerage firms work, how to avoid scams and what to do if you’re scammed.
People are being increasingly targeted by unauthorised forex trading and brokerage firms offering the chance to trade in foreign exchange, contracts for difference, binary options, cryptoassets and other commodities.
They promise very high returns and guaranteed profits, either through a managed account where the firm makes trades on the investor’s behalf, or by using the firm’s trading platform.
How forex (FX) trading and brokerage scams work
Most people report that they have initially received some returns from the firm that give the impression that their trading has been a success.
They are then encouraged to invest more money, at which stage the returns stop, their account is suspended, and there’s no further contact with the firm.
Scammers also target consumers searching for investments online through search engines like Google and Bing. They may offer high returns to tempt you into investing, but some may also offer more realistic offers to appear more legitimate.
If you are offered an investment opportunity through a search engine, they may not be regulated or authorised by us. You can check the FCA Warning List[1] for firms to avoid.
Beware of clone firms
Many fake trading and brokerage firms will use the name, firm registration number (FRN) and address of firms and individuals who are FCA authorised. This is called a clone firm[2].
The scammers then give their own phone number, address and website details, sometimes claiming that a firm's contact details on our Financial Services Register[3] or FCA Firm Checker[4] are out of date.
Scammers might also claim to be overseas firms, which don't always have their full contact and website details listed on the FS Register. They may even copy the website of an authorised firm, making subtle changes such as the phone number.
How to protect yourself
Many scam firms claim to be based in the UK and even claim to be FCA authorised.
You should only deal with financial services firms that are authorised by us. Use the FCA Firm Checker[4] to find out if a firm is authorised and has permission for the service it's offering you. If you can’t find a firm on the Firm Checker, contact us[5] on 0800 111 6768.
Always be wary if you’re contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true.
If you're contacted unexpectedly by a financial business or individual, make sure you reply using the contact details on the Firm Checker[5].
Find out more on how to protect yourself from scams[5].
If you've been scammed
If you're worried about a potential scam, or you think you may have been contacted by a fraudster, report it to us. Call us on 0800 111 6768 or use our contact form[8].
If you've already invested in a scam, fraudsters may try and target you again or sell your details to other criminals.
The follow-up scam may be completely separate or related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee.
