Can You Get Scammed by a CFD Broker?

A CFD (contract for difference) is a transaction in which one party pays another the difference between the current value of an underlying instrument and its value at a specific time in the future. The underlying instruments can range the gamut from stocks to stock indices, currency pairs, cryptocurrencies, and commodities.

CFDs are what are known as “derivatives,” meaning that the underlying instrument does not have to be owned at any time by either party. Instead, the profit or loss is derived from market fluctuations. CFDs can be offered to retail investors only by licensed brokers working for brokerages that are registered to operate by national financial regulators. They are unavailable in certain countries, most notably the United States.

Anyone calling himself a broker without a license is, by definition, violating the law. A firm calling itself a brokerage without being registered is, by definition, violating the law. They’re also scammers.

The number of scam CFD sites on the internet exploded in 2018. That’s no accident. Early in the year, Facebook, Google and Twitter all prohibited advertisements for binary options. Unlicensed, unregulated online binary options scams had become the scourge of the internet, swindling tens of billions of dollars from unsuspecting investors over the course of a decade. In response, a few countries began to enact prohibitions. Then, in mid-2018, the European Securities and Markets Authority (ESMA) enacted a three-month ban on binary options throughout the European Union (EU), which was then extended for an additional three months and can be extended indefinitely.

In anticipation of these obstacles, virtually every binary options site was rebranded as a forex or CFD brokerage (forex, short for “foreign exchange,” is a type of CFD that is restricted to currencies). In this way they can wiggle through social media advertising restrictions and claim (albeit disingenuously) that they are not violating the EU ban on binary options.

Nonetheless, these former binary options sites retained all of their content. They continue to feature the same trading platforms that, in reality, are sophisticated video games designed to placate inexperienced investors into thinking they are now contracting CFDs.  In fact, they’re not contracting anything. The platforms are not plugged in to any exchange. All the money investors deposit into their accounts is siphoned off immediately by the scammers.

At MyChargeBack we know all the inevitable scenarios. We’re an international fund recovery firm that specializes in retrieving money lost by our clients in online scams. As was the case with binary options sites, investors will be urged by their account managers to deposit more and more money, and when it comes time to withdraw their supposed earnings, they’ll be told that they can’t do so due to the fine print on the Terms and Conditions page. Either they’re required to make a gargantuan number of trades before they can do so, or repay a bonus they were never asked if they want, or find that their account has been emptied due to a substantial loss the same day, or find that their account manager has disappeared and no longer responds to email or phone messages.

The bottom line is that investors have to be careful. Check the scam warning lists posted online by your national regulator before handing over your money. If you have fallen victim to one of these scams, however, or if you suspect you have, contact MyChargeBack for a free consultation to determine if there is a way to recover your funds.

MyChargeBack.com is owned and operated by Cactil LLC, an American dispute resolution consultancy firm headquartered in New York with a global focus and an international client base throughout North and South America, Europe, Africa, Asia, and Oceania. The MyChargeBack team, which has recovered more than $10 million in funds for its clients to date, is comprised of professionals with extensive financial, legal and regulatory backgrounds who assist victims of binary option scams retrieve their money. MyChargeBack is able to accomplish that because it knows how chargebacks work and how to ensure that each client’s case will be presented effectively to the bank. Contact us today for a free consultation. File a complaint today at: https://mychargeback.com/binary-options/

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