Find out how unauthorised forex trading and brokerage firms work, how to avoid scams and what to do if you are scammed.
UK consumers 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 trading using the firm’s trading platform.
We are aware that scammers are targeting consumers searching for investments online, in particular through search engines like Google and Bing. Those offering or promoting products or investment opportunities found through search engines are not necessarily authorised or regulated by the FCA. You can check the FCA Warning List for firms to avoid.
How Forex (FX) trading and brokerage scams work
Most consumers report they have initially received some returns from the firm to give the impression that their trading has been a success.
They will then be encouraged to invest more money but at this stage or soon after the returns stop, their account is suspended and there’s no further contact with the firm.
Many scam firms claim to be based in the UK and even claim to be FCA authorised.
Beware of clone firms
Many bogus 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’.
The scammers then give their own phone number, address and website details, sometimes claiming that a firm's contact details on the Register are out of date.
Scammers might also claim to be an overseas firm, which don’t always have their full contact and website details listed on the Register.
Scammers may even copy the website of an authorised firm, making subtle changes such as the phone number.
How to protect yourself
If the firm’s contact details aren’t on the register or the firm claims they’re out of date, call our Consumer Helpline on 0800 111 6768.
You should check the firm isn’t a clone firm by asking for their firm reference number (FRN) and contact details and then calling them back on the switchboard number on our Register – never use a link in an email or website from the firm offering you an investment.
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.
You should seriously consider seeking financial advice or guidance before investing. You should make sure that any firm you deal with is regulated by us and never take investment advice from the company that contacted you, as this may be part of the scam.
Read more about how to find an adviser.
If you have been scammed
If you’ve invested with a firm that’s not authorised by the FCA, your investment is not protected by the UK’s Financial Services Complaints and Compensation Scheme.
If you have already invested in a scam, fraudsters are likely to 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.
If you have any concerns at all about a potential scam, contact us immediately.