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How to Identify Scam Brokers?

How to Identify Scam Brokers?

The old saying “Knowledge is power” wasn’t coined as a tool for parents in order to torture their children who would rather be outside playing than studying.  

It came to be because it contains basic truth – knowledge=power. In the world of binary options trading knowledge equals higher profits. And, even more importantly, knowledge will help traders to identify scam brokers in binary industry and a trustworthy one.

In this binary guide, we shall offer South African traders sound advice on how to identify binary options scam brokers and opt for those with a long-standing reputation.

Know Your Binary Broker

Know Your Customer is a standard procedure when traders open an account with a broker. South African traders should take time and do the same and gather as much information possible before picking a broker they wish to trade with.

The work is time-consuming but, in the end, it will mean the difference between being taken in by a scam broker or trading with a legitimate one where profit can be made. Brokers, such as IQ Option, StockPair or 24option are present on binary market for years now and have a reputation of being a serious broker to trade binary options with. 

Poor Terms & Conditions

Another time-consuming task but again, one which has a worthy goal. Traders have to know the information listed under terms & conditions if they want to do business with a chosen broker.  

Check if a broker has easily understandable terms and conditions. We recommend our readers to avoid brokers who have poor explained T&C or those hard to find on their platform.

Oftentimes traders trying to read terms & conditions get confused or they do not understand what is written. Which is where customer support comes in. Reliable and reviewed brokers such as IQ Option or 24option have very detailed but transparent terms & conditions traders can easily find on their platform and understand.

 Hard to Contact Customer Support

A legitimate broker will have top notch customer support because they want their traders well-informed. A broker who isn’t a scam shall also want to be on hand if traders run into problems.

However, with scam brokers, South African traders will face with inability to contact customer agents, who would most likely always be unavailable. That is one of the first signs that traders are dealing with scam binary brokers.

With a legitimate broker, customer support will be available, responsive and well-trained. They will also be able to provide answers or give necessary clarification if South African traders do not understand something. Sometimes waiting to get a response is inevitable, but if traders cannot get an answer even after multiple attempts then it is possible they are dealing with a scam broker.   

Privacy Breach & Cold Calling Sindrome

Another way of identifying scam brokers is the way they handle personal data. If traders start receiving calls from brokers who are pushing them to invest, traders should proceed with caution since it is most likely a scam broker.

Scam brokers usually promise huge profit when traders join their platform. This practice is called cold calling and it is seen as privacy breach. This means that a broker traders used either sold their private info to a third party or they want to press additional services traders’ neither need nor have signed up for.

We urge South African traders to be very careful in this respect.

Insufficient Protection of Trading Platform

Personal and financial data should be of great importance to a broker.

So, when South African traders start looking for a trustworthy binary broker another way to identify scam brokers is the SSL certificate. Therefore, when a trader goes to check a broker they should look at the web address of the broker.

If there is a small green padlock  and HTTPs in front of the address that means the connection is secure.

Connected to this is also the longevity of domain where a broker has a web site. Every respectful broker who wishes to build a long-term business will not put up a temporary site. Ergo, a broker will not invest in a domain for less than a year. What South African traders can do is check with Alexa.com and get more information about the domain and broker web site.

Those who do not protect their platforms nor pay attention to ensuring safe trading environment are most likely scam brokers.

“Too-Good-To-Be-True” Offers

safe tradingBasically every broker will have certain bonuses which can be found clearly explained on brokers’ platform.

However, if a broker offers bonuses traders cannot understand and customer support is either being elusive when traders inquire about it or, worse, never responding chances are traders are dealing with a scam broker.

Another helpful indication that traders are dealing with a scam broker is when they spot unrealistic offers on their platform. A broker who is throwing around offers such as: “100%  winning rate” or lucrative “$700 bonus” after signing up all the way to promising fanciful amounts traders can earn on monthly basis without means to back up such claims is a scam broker South African traders should avoid.  

Non-registered Broker – Yes or No?

Now, this is a somewhat slippery-slope area.

Naturally, it is desirable that a broker should have a license, but to identify scam brokers as such solely based on their lack of a licence is not a wise approach.

Why? Because there are plenty of binary brokers available with and without licence who are safe, reliable brokers and have been for years.

Brokers such as 24option and IQ Option which have a great reputation and a regulation licence.
Regulatory authorities across Europe do provide traders with that extra safety which is highly desirable in any business and should not be dismissed.

But, in the end,  it all comes down to research and careful choice.

Refusal to Process Withdrawal

One of the worst things that can happen to traders is when their request to withdraw money gets either rejected or simply ignored. This happens very often with scam brokers. Traders seeking withdrawal are either denied their funds or they keep getting calls where they are being persuaded by the broker to invest further instead of withdrawing.

Other side of the medal is that broker does not respond at all to calls/emails from traders trying to withdraw their funds. Sadly, in most cases, this situation identifies a broker as a scam.  

Miscellaneous in Binary Industry

Binary options trading is a high-risk business and trustworthy brokers do not shy away from pointing that out on their websites, so South African traders should look for a proclamation which points out the risk as well as the possible gain.

Another thing to look out for when trying to identify scam brokers are incomplete or very poor details on brokers’ website and fake reviews as well as “limited time offers” which are constantly present on the broker platform.

Gathering information beforehand, doing research and taking time to pick a broker can mean the difference between losing money or gaining it. And, as they say, prevention is the best medicine.  

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