Can You Get Your Money Back from a Broker?

Hello, colleagues and fellow trader friends!

Our site has many useful articles about the rules and methods of trading Forex and binary options. But sometimes an unpleasant situation arises when a broker's client has their account “zeroed out”. At the same time, communication with the Support Service does not bring clarity and it seems that the money is gone and lost forever.

Despite the fact that financial service providers are under the supervision of financial regulators that guarantee clients protection of invested funds, filing a complaint is a costly and not always promising process. From a legal point of view, a trader will have to sort things out where the company is registered. What can be done if you find yourself in such a situation, namely about the Chargeback procedure from Visa and Mastercard, is covered in our material.

In reality, scammers in the Forex and binary options markets may be prepared for a scam, using the peculiarities of local legislation and the casuistry of user agreements and offer contracts. This allows them to deprive a trader of the transferred deposit or profit.

Some of them are outright “pure scams” as well, companies created to collect a certain amount of funds, after which the legal entity is closed and the founders disappear.

Over 20 years of the financial services market provided by brokers on the Internet, complaints about non-return of funds have affected both well-known brands and unknown companies, firms with “reliable” American licenses and firms with certificates from countries that are not easy to find on a map.

Traders tried various ways to “fight” for funds they believed had been stolen, up to hiring lawyers and engaging in lawsuits on the “paradise islands” of offshore jurisdictions. The only truly effective option for returning a deposit turned out to be the chargeback procedure, cancellation of a payment provided for by the rules of international payment systems.

To simplify life for clients and make cashless retail settlements safer, Visa and Mastercard came up with a procedure for disputing and returning funds from unscrupulous sellers or service providers, including financial ones.

Theoretically, a trader who at some point discovers an “unfair zero” in their account writes a statement against the broker to the bank, indicating the dates and amounts of the transferred payments. The bank then contacts the local branch of the acquiring bank, which debits these funds from the company's settlement account.

In practice, it is enough for the broker to bring a copy of the contract, point to the “Risks” section, and the dispute will be resolved in its favor.

It should be understood that by depriving a trader of a deposit, a scam company risks forever losing the ability to be serviced by Visa and Mastercard, for this the number of Chargeback operations has to exceed 2%. Therefore, theft of funds is carried out according to pre-arranged schemes where the “complainant” will be in an obviously losing position:

The Chargeback procedure does not provide for liability of third parties, so the absence of a proven connection between the broker and the electronic payment wallet will automatically make the procedure for claiming the lost deposit meaningless. If the client's money was delivered to the broker on time, there can be no claims against the payment system.

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

A trader can gain access to trading on the Forex market by signing an Agreement or by joining an offer, the broker's standard terms. Inattentive study of trading conditions can deprive a trader of funds and of the right to get them back if:

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

Each bank has its own developed Chargeback algorithm and a strategy formed over the years for reviewing various cases. Returns are handled mainly by the Security Service, which will accommodate a client's complaint about a store, but will “reject” a statement that says “lost money on Forex (binary options)”.

The first thing the victim must understand is that they became a victim of improperly provided financial services. Try to study the return rules of the selected payment system and find in advance a suitable description in the Chargeback codes on the Mastercard and Visa websites. It is precisely this wording that will be presented to the broker by the acquiring bank when the issuing bank registers the statement.

Despite the fact that in theory the broker is obliged to prove its case, before contacting the bank that issued the card, prepare a package of evidence. In addition to the list of documents specified in the bank's instructions, if any, support the complaint with screenshots of correspondence with the company showing the refusal to withdraw the deposit. Also prepare a copy of the Agreement, download it from the site, and try to find clauses proving the broker is wrong; if there are none, simply point to the “Company Obligations” and “Client Rights” sections.

When preparing the document package, do not forget about the 540-day Chargeback limitation period from the moment of transfer. Remember: the initial decision to launch the procedure is made by the local bank. Visa and Mastercard enter the dispute only as arbitrators, but they will not spoil relations with a financial institution.

If the bank accepted the claim, then the second stage begins, proceedings between the acquiring bank and the broker. This is a lengthy process, since the company will receive time to collect evidence and to appeal in the event of a favorable decision for the applicant client.

If the trader is refused, they will be given an official response and evidence supporting the reasoning, after which they can, theoretically, if they find new circumstances, file the complaint again.

As can be seen from the scheme described above, the conclusions made by card-issuing banks and acquiring banks processing payments play a major role in the decision to return funds. Such companies are guided exclusively by their own ideas about the weight of the parties' arguments.

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

Brokers must prove that the services were provided under the contract in full, but the acquirer may side with the trader if the arguments that the trader's “tick” under the Agreement constitutes a signature are unconvincing, or if there is no evidence of actually executed trades.

Another problem for brokers proving they are right is the “kitchen” format of business. If the client was not given the opportunity for real, competitive trading, and the funds were simply written off and never went to the market, especially when it comes to binary options, the trader will be returned all transferred money that falls within the 540-day period.

If you are trying to get funds back based on “other people's advice”, remember that decisions in banks depend on specific people, so the same financial institution may make different decisions in identical cases, or refuse a statement “written from a template” that has already gone through all stages of Chargeback before.

From the description of the mechanism for getting money back from a scam broker, it is clear that the success of claims directly depends on the ability to defend one's case correctly from a legal standpoint or on having connections in banking structures. Therefore, a services market has arisen around the Chargeback procedure applied to brokers, where companies and private individuals are ready to help traders get their money back.

One of the features of such services is prepayment and high commissions reaching 30% of the amount transferred, withheld, or seized by the broker.

Before rushing to the first company you come across in the hope of getting back what was lost, if you are offered help returning money from a broker, you should understand:

There is a lot of advertising on the Internet about help returning money from brokers, but you need to choose an intermediary by the same principles by which you should have chosen a Forex company:

Most companies in the first lines of search results, as well as in Yandex.Direct and Google.Adwords ads, have an ambiguous reputation when it comes to returning funds. This may be connected both with real cases of delaying matters, since the fact that they applied to the bank cannot be verified, and with the unpredictability of the case outcome.

As a result, for every positive review there are examples where the prepayment was paid but the issue was not resolved.

Beware of “free work” options without prepayment: such firms will ask the trader to issue a power of attorney in the process and will appropriate the received funds. A supposedly successful transfer to a foreign account that they will open remotely is also a common option. Scammers will demand payment for the work, pointing to supposedly credited money in the account, which a “bank representative” will report to the trader.

Avoid “helpful calls” from people who are aware of the problem of a non-paid deposit, in 90% of cases this is a scam by firms affiliated with fraudsters that plan to profit from the victim a second time. As a rule, these companies may be registered in the same offshore jurisdiction, a fact that criminals will present as an additional advantage.

A large number of scams and deposit losses in the Forex market fell on 2014. The situation reached such a stage that it made the front pages of national mass media.

A positive effect of the noise that followed was articles in the state press about how to choose a broker correctly and collections of ratings of reliable companies providing services in the Forex market.

The advice is quite simple: companies whose brand has been present in the international financial services market for decades will not seek to squeeze a trader's deposit. This can turn into reputation losses for them or serious problems created by a state that does not want a repeat of the 2014 situation.

However, there is an exception in the form of one very large company that has branches in all regions of the Russian Federation and is known for persuading clients to take out loans... I think you all guessed which company this is... We cannot write the name because they are very fond of going to court) Of course, it is not worth dealing with these comrades.

Small fraudsters or firms “assembled on the knee”, without making a profit, may go off the rails, 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.

When starting to work in the Forex market, most people see only future advantages and do not assess the risks. Always work by the formula: “Risk should not lead to strong emotional consequences, and the amount invested should not be painful to lose.”

Read everything you sign or agree to under a collective or public offer. Remember: if you save time on studying legal nuances and checking the validity of the broker's business now, you will have to spend much more effort and emotion later studying documentation and ways to get back funds lost to a scam broker.

Beware of calls from unknown numbers from shady companies, methods of verbal influence thanks to which 70% of fraud occurs, including coercion to open an account with an unknown firm.

The conduit of this evil is the telephone and calls from fraudsters persuading you to “open an account without risk”. Do not think that you can withstand psychological tricks refined day by day, just do not answer a call from an unknown number or hang up, and actively use the “black list” function on your phone. You can also look up the caller's number on the Internet, there are now plenty of sites online where people leave comments about numbers that called them. If there are only negative reviews there, financial fraudsters, promises of mountains of gold, and so on, there is no point at all in answering such a call.

Sincerely, Alexey Vergunov TradeLikeaPro.ru