Can I get my money back from a broker?
Hello colleagues and fellow traders!
Our site has many useful articles about the rules and methods of Forex trading and binary options. But sometimes an unpleasant situation arises when the broker's client is “reset the account”. At the same time, communication with the Support Service does not lead to clarity and it seems that the money is gone and lost forever.
Despite the fact that companies providing financial services are supervised by financial regulators that guarantee customers protection of invested funds, drawing up a complaint is an expensive and not always promising process. From the perspective of legal law, the trader will have to understand the place of registration of the company. What can be done if you find yourself in such a situation, namely about the Chargeback procedure (chargeback) from Visa and Mastercard - in our material.
What is the most effective way to return money?
In reality, scammers in the Forex and binary options markets can be prepared for scam using the peculiarities of local legislation, casuistry of the agreements and offer agreements offered to the user. This allows you to deprive the trader of the transferred deposit or profit.
Some of them are completely “pure scam” - a company created to raise a certain amount of funds, after which the legal entity is closed with the subsequent disappearance of the founders.
Over the 20 years of the existence of the market for financial services provided by brokers on the Internet, complaints of non-return of funds have affected both common brands and unknown companies, firms with "reliable" American licenses and firms with country certificates that cannot be immediately found on the map.
Traders tried in various ways to "fight" for the funds stolen, in their opinion, up to hiring lawyers and litigation on the "paradise islands" of offshore. The only effective option for the return of the deposit was the chargeback procedure - the cancellation of the payment provided for by the rules of international payment systems.
Refunds transferred to the broker under the Chargeback procedure - expectation vs reality
To simplify the lives of customers and make non-cash retail settlements safe, Visa and Mastercard came up with a procedure for protesting and refunding funds from dishonest sellers or service providers, including financial ones.
- Good news for traders - the burden of proof lies with the broker;
- Bad news: the local bank determines the chargeback rules, the statute of limitations applies to the payment, money is returned only in the amount of the transfer (immediately forget about paying profit).
Theoretically, a trader who finds out at some point an “unfair zero” in his account writes a statement to the bank to the broker indicating the dates and amounts of the payment transfer. He turns to the local branch of the acquiring bank, which deducts these funds from the company's current account.
In practice, it is enough for the broker to bring a copy of the contract, indicating the section “Risks” and the lawsuit will be completed in his favor.
It should be understood that depriving a trader of a deposit, a fraudster risks permanently losing the possibility of servicing in Visa and Mastercard - for this it is necessary that the number of Chargeback operations exceeds 2%. Therefore, theft of funds takes place according to pre-rolled schemes, where the “complainant” will be in a knowingly losing position:
- Use in the scheme of transfer of legal intermediaries transferring funds of clients under a processing agreement to a broker. In this case, a refund is possible only if they did not reach the broker;
- Transferring funds through legal payment electronic systems;
- Liquidation of a legal entity or withdrawal of assets from a current account.
The Chargeback procedure does not provide for third party liability, therefore, the lack of a proven connection between the broker and the electronic payment wallet will automatically make the lost claim procedure senseless. In case of timely delivery of client money to the broker, there can be no complaints to the payment system.
The return of funds stolen by the broker is relatively simple in the following cases:
- Non-payment of income on the broker's investment instruments;
- Refusal to return a deposit that did not participate in transactions.
Refund problems due to broker offer
The trader can get access to trading on the Forex market by signing the Agreement or by joining the offer - the standard conditions of the broker. Inattentive study of trading conditions may deprive the trader of funds and the right to return them if:
- The client lost money as a result of the forced closure of positions, since they reached the stop-out level;
- I missed the deadlines for appealing the loss due to a spike - a technical overlay that led to the translation of non-existent courses;
- The loss was written off due to the nuances of structural products (for example, they were converted into national currency and the money burned out as a result of the crisis);
- Loss of funds due to penalties for incorrect replenishment of the account (for example, frequent withdrawal and deposit of funds without commissions);
- Write-off of profit due to the high frequency of transactions.
Therefore, before proceeding with the Chargeback operation, carefully study the reasonable response of the Support Service, which usually contains clauses of the Agreement or offer. Take into account the fact of your prior consent to these conditions, because the broker will provide the acquiring bank with exactly the same arguments.
Chargeback broker money transfer scheme transferred from a credit card
Each bank has its own developed algorithm with chargeback and a strategy developed over the years to deal with various cases. Refunds are mainly handled by the Security Service, which will meet the customer’s complaint about the store, but will “wrap up” a statement stating “lost money on Forex (binary options)”.
The first thing the victim must learn is that he is the victim of inappropriate financial services. Try to study the return policy of the selected payment system and find the appropriate description in the chargeback codes on the Mastercard and Visa sites in advance. It is this wording that will be presented to the broker by the acquirer bank when the application is registered by the card issuing bank.
Despite the fact that, in theory, the broker must prove his innocence - before contacting the bank that issued the card, prepare a package of evidence. In addition to the list of documents listed in the bank’s instructions (if any), back up the complaint with screenshots of correspondence with the company with a refusal to withdraw the deposit. Also, prepare a copy of the Agreement (download from the website), try to find points proving the broker is wrong, if there are none, just point to the "Company Responsibilities" and "Client Rights" sections.
When preparing a package of documents, do not forget about the chargeback period of 540 days from the date of transfer. Remember: the local bank makes the initial decision to start the procedure. Visa and Mastercard enter into a dispute only as arbitrators, but they will not spoil relations with a financial institution.
If the bank accepted the claim, the second stage begins - the trial between the acquiring bank and the broker. This is a lengthy process, as the company will get time to collect evidence and appeal, in case of a positive decision in the direction of the client-applicant.
In case of refusal, the trader will be given an official response and evidence of argumentation, after which he can, theoretically, having found new circumstances, make a second complaint.
Paradoxes of Chargeback
As can be seen from the above scheme, the conclusions made by the card issuing banks and the acquirers making payments play a large role in the decision on the return of funds. Such companies are guided solely by their own ideas about the weight of the arguments of the parties.
This leads to paradoxes, sometimes interpreted in favor of the broker, but customers who apply for a refund can receive 100% of transfers, even if the money was drained through their fault.
Brokers must prove that the services were provided in full under the contract, but the acquirer can take the side of the trader in the case of unconvincing arguments saying that the “tick” set by the trader under the Agreement is a signature, or in the absence of evidence of transactions actually performed.
Another problem for brokers to prove their innocence is the "kitchen" format of the business. If the client was not given the opportunity of real, competitive bidding, and the funds were simply debited and did not go to bidding (especially for binary options), the trader will be returned all the money transferred that falls within the 540-day period.
If you are trying to make a refund according to someone else’s advice, remember that decisions in banks depend on specific people, therefore the same financial institution may make different decisions for the same cases, or not accept a statement that is “written in carbon copy” and passed Prior to this, all stages of chargeback.
Сhargeback services market - money back from a broker
From the description of the mechanism for returning money from a fraudulent broker, it can be seen that the success of claims directly depends on the ability to legally defend one's innocence or the presence of connections in banking structures. Therefore, around the chargeback procedure applied to brokers, a service market has emerged where companies and individuals are ready to help traders return the money.
One of the features of the work of such services is an advance payment and high commissions, reaching up to 30% of the amount transferred, withheld or withdrawn by the broker.
Before rushing into the first company that comes across in the hope of returning the lost, if you are offered to return money from a broker, you should understand:
- Appeal to intermediaries will not save you from collecting initial evidence of fraud;
- The company will help to “promote” the application to the issuing bank and prepare a package of documents, but it will never guarantee a 100% result, since the main decision on chargeback is made by the ecway bank;
- If the funds are transferred through an intermediary (the recipient's details indicate an individual or a certain settlement and payment service, etc., but there is no clear broker data) - the money will not be returned;
- If the brokerage company is bankrupt, then the advance payment to the intermediary will “burn out”.
There is a lot of advertising on the Internet on the topic of helping return money from brokers, but you need to choose an intermediary according to the same principles as you should choose a Forex company:
- The legal entity must be registered in the national jurisdiction of the client (can be checked by register);
- Lack of 100% of promises, partial prepayment;
- Specialization - a lawyer should deal with chargeback issues closely and constantly.
Most companies in the first lines of search results (as well as in advertising Yandex.Direct and Google.Adwords) have an ambiguous reputation for refunds. This may be due to both real cases of protracted cases (the fact of their appeal to the bank cannot be verified), and the unpredictability of the outcome of the case.
As a result, there are examples of every positive feedback when the prepayment has been paid, but the issue has not been resolved.
Beware of the options for "free work" without prepayment, such offices in the process will ask you to draw up a power of attorney from the trader and appropriate the money received. The variant of supposedly successful transfer to a foreign account, which will be opened remotely, is also common. Fraudsters will demand payment for the work, indicating the allegedly received money to the account, which the "representative of the bank" will inform the trader.
Avoid "helpful calls" from people who are aware of the problem of non-payment of a deposit - this is 90% of cases of divorce of affiliates affiliated with fraudsters who plan to cash in on the victim in the second round. As a rule, these companies can be registered in one offshore jurisdiction, a fact that attackers will present as an additional advantage.
How to protect yourself from Forex broker fraud?
A large number of scams and loss of deposits in the Forex market occurred in 2014. The situation has reached such a stage that it has hit the front pages of national mass media.
A positive effect of the past hype was articles in the state press on how to choose the right broker and selection of ratings of reliable companies providing services in the Forex market.
The tips are simple enough - companies whose brand has been present on the international financial services market for decades will not seek to squeeze a deposit from a trader. This may result in them losing their reputation or serious problems that will create a state that does not want a repetition of the 2014 situation.
However, there is an exception in the form of one very large company with branches in all regions of the Russian Federation and known for persuading customers to take loans ... I think you all guessed what kind of company it was ... We can’t write the name, because they are very fond of suing) Of course, it is not worth doing business with these comrades.
Small fraudsters or companies "assembled on the knee", without making a profit, can go off "in all seriousness", even if the scam was not supposed at the stage of creation. Therefore, when choosing a company, pay attention to the so-called white list of reliable brokers.
Starting to work in the Forex market, the majority sees only future advantages, but does not assess risks. Always work according to the formula - "Risk should not lead to strong emotional consequences, the invested amount should not be sorry for the loss."
Read everything that you sign or agree to by the collective or public offer. Remember: saving time on studying the legal nuances and checking the validity of the broker's business now - you will have to spend a lot of energy and emotions later, studying the documentation and ways to return lost funds from a fraud broker.
Beware of calls from unknown numbers from left-handed companies - verbal influences that account for 70% of fraud, including forcing you to open an account in an unknown office.
The conductor of this evil is the telephone and calls of intruders who urge "to open an account without risk." Do not think that you can resist the psychological tricks that are being improved day by day - just do not answer the call from an unknown number or hang up, actively use the black list function in your phone. You can also punch the number of the caller on the Internet - now the network is full of sites where there are comments of people who have been called from certain numbers. If there are only negative reviews (financial fraudsters, golden mountains and so on), there is no point in answering such a call.