What is Forex Withdrawal Scam? How to Prevent Failed Withdrawal?

From all kinds of materials and messages of forex broker scams exposured on the Internet, forex withdrawal scam would come up as the top answer.

Withdrawal can be regarded as the most important part for every trader, then how to get your profit out of your account successfully？ What are characteristics of withdrawal scams？ How to avoid trapping in a withdrawal scam？ Today, we are going to discuss matters about forex withdrawal scams.

What is a Forex Withdrawal Scam？

Whether you are using an online broker for short-term trading or for longer-term investments, there will come a point when you may want to enjoy the fruits of your trading activity if you've been making profitable transactions, or you just need access to your funds for any reason. To do that, first you have to withdraw money from your broker account.

if you meet all requirements and follow the right steps to submit a withdraw apply, but your broker doesn't release your funds, you may have encounter a scam.

Like many other trends involving money, there are many scam versions that are seeking to exploit people in forex trading. In the case of false forex brokers, sometimes it can be difficult to know for sure they are problematic until you have already entrusted them with your money. A common problem is when the scammers deny clients withdrawal requests and refuse to pay clients' money back. This is what is known as a forex withdrawal scam.

What are Signs of Forex Withdrawal Scam？

Along with other fraudulent activity, such as crypto scams and wire fraud, forex withdrawal scams cause a serious problem for novice forex trading who are looking for a broker. They may disguise their service as trustworthy and in line with industry standards for weeks or even months. They may even let the client make some money, perhaps they will let him or her withdraw a small amount of money.

However at some point, these scam artists will hold the client's account hostage. Here are some signs of forex withdrawal scam:

1.Claim that there is a rule that clients can't withdraw money until certain conditions are fulfilled

The broker may tell you that your withdrawal won't be finished until some conditions are fulfilled. They may ask you to deposit extra money including tax fees or service fees before your withdrawal. But if you invest as they told, then they will find other excuses to charge more and just deny your withdrawal requests.

2.Cite a clause that they can decide whether or not to release funds as they see fit

The broker may cite some terms of conditions and uses more rules to “judge” your withdrawal application is fitable or not. Of course your requests will not be passed.

3.Charge a very high fee for withdrawals

You may be asked to pay a very high fee or be required to execute a certain number of trades or transactions before you are allowed to withdraw money.

4.Ghost the client and ignore communications

The broker may stop answering emails or texts. On the rare occasions they can be contacted, they will claim they did not get the previous emails because the client must have whitelisted their address or some other reason. If some time has passed and lack of communication cannot be ascribed to a legitimate reason, that must be a scam.

5.Your withdrawal request is not followed up properly for days or even weeks

You can tell if a forex broker is a scam if your withdrawal request is not followed up properly for days or even weeks despite the withdrawal submission according to the procedures.

The suspicions can further be confirmed if your repeated questions and requests for explanation go unanswered, or if your request is responded to in a convoluted manner by the customer service with various excuses such as the account is frozen or other ridiculous reasons to delay the withdrawal.

6.Forbid clients to withdraw

There are many ways a scam broker can do to stop you from withdrawing your funds. For instance, you could deposit $100,000 USD in your account and get a $1,500 bonus. Let's say at some point you lose and wish to withdraw the remaining funds. In this case, the broker may say you can't withdraw the bonus funds even when you still have some money left (not including the bonus).

7.Disappear entirely

You may not be able to access their site or have any communication with them. They may have blocked your IP address or shut down entirely and made off with all of their clients' funds.

All that almost can conclude as one situation: you are trading with an unlicensed broker.

How to Prevent Failed Withdrawal？ --Avoid a Fraudulent broker

If you are trading with a broker who don't allow you withdraw your money, you are definitely trapped in a withdrawal scam conducted by a fraudulent broker. So when you open an account with a broker, you need to know that you can withdraw your money whether there are gains or losses. It is essential to work with a broker who is licensed and has a strong reputation.

If you want to prevent failed withdrawals, your effort should start from the very beginning. This is not a simple task especially for rookie traders, because there are many things that you should take into consideration.

1.Do Your Research

Take your time to research each broker when you want to make money quickly.

Always work with a regulated broker. If the broker does not allow you to withdraw your money, you at least have some recourse an authority that can take action against the broker. It isnt enough simply to notice the broker has a license. You should ask the following questions:

· Is the license up to date？

· Is the license from a reliable regulator？

· Is the license genuine？

You may notice that a Forex broker has a license, but the license may be out of date. You may think, “Well, he is licensed so it must be okay.” However, a broker might have lost his or her license because of misbehavior, so it is important to mind the date. Ensure that the license is from a reliable regulator.

You should try as far as possible to determine whether the license is genuine and not counterfeit. Checking with the regulator that they indeed issued the license is a good move.

2.Look at the Forex Broker's Withdrawal Policy

Before working with a broker, you should ask the following questions:

· How to get my money back from Forex trading？

· What are the stated procedures for withdrawals？

· Is there a clear path to withdrawing your money from this broker？

· Are there high withdrawal fees？

· Is there a waiting period or any special requirements for withdrawal？

You should be able to withdraw your money from a broker easily. Look at any specific fees, delays, and rules for withdrawal very carefully. This doesn't mean that all fees and guidelines are red flags, but they should be placed under scrutiny to make sure they make sense.

Reasonable withdrawal regulations may include a withdrawal fee, but these should be very low. Many reliable brokers do not charge special fees for withdrawals, but there may be charges for specific withdrawal methods. These should be quite minimal and be clearly stated in terms and conditions. if traders are asked to wait a week or more for withdrawal of funds, know that this is not a common requirement from reputable brokers.

3.Withdraw Your Funds Regularly

Even if your first withdrawal was a success, it is necessary to withdraw regularly. Don't let the funds build up too much in your trading account. Many traders deliberately “accumulate profit” in their trading accounts in hopes of compounding. But this behavior can tempt the broker to manipulate you so that you can't withdraw anymore. They may make excuses to cancel the profit, or accuse certain violations and make you pay the penalty.