Brokers may have ended up on this list for any of the following reasons, usually a combination of several.

Not Regulated

The vast majority of scam brokers are not regulated or have a third-tier license with a regulator that provides no oversight. 

Clone Brokers

These brokers make up names similar to regulated brokers with solid reputations. They deceive consumers and trick them into thinking they are the regulated broker. This type of scam is particularly damaging, because it not only misleads the consumer but can harm the legitimate broker’s reputation. 

No Transparency

Many frauds naturally don’t want to reveal detailed information about themselves. They will either not mention any people who run the brokerage or will have fake people with stock photos. You can easily verify contact information and identities online. 

Guaranteed Returns

Any broker that guarantees a certain level of return on investment is not telling you the truth. This is particularly true if brokers claim to offer impossible-sounding returns, such as 100% in a month. Just to give you an idea of what is reasonable, legitimate brokers usually return between 6 to 10% for investors every year.

Push Risky Assets such as Forex, CFDs and Cryptocurrencies

Not all forex,CFD and cryptocurrency brokers are scams, but be suspicious if the broker only offers high-risk assets. Fake brokers can hide behind excuses that money was lost in a high-risk trade when in fact they may have pocketed the money. 

Accept Only Cryptocurrencies to Fund Accounts

If a broker allows you to fund your account only in cryptocurrencies, be careful. They may think they can disappear with funds easier if they are bitcoin transactions. 

Details Don’t Check Out

If you find that the names of people don’t match the information on the site or if the brokerage address is instead a fast food restaurant, don’t trust anything else they tell you. No legitimate broker fakes information. 

Poor Website or No Website

Bad content writing and shoddy design may not seem like a big deal, but it can indicate a lack of professionalism that can signal a scam. Not having a website at all and finding clients only on social media is also not a good sign.

Aggressive Manner

Regulated brokers are rarely pushy. They are busy returning value for loyal clients and they don’t need to seem desperate. 

Won’t Let You Withdraw Funds

If you request a withdrawal of your funds and the broker makes an excuse or claims you will have to pay huge fees that weren’t mentioned before, that’s a sign that the broker is a scam.