We have plenty of articles on our website about Forex and binary options trading. But sometimes an unpleasant situation happens when a broker's client account is credited to zero. At the same time, the Support Service does not help you and it seems that the funds are lost without hope.
Though financial services companies are under the supervision of financial regulators, which guarantee clients protection of invested funds, the creation of a complaint is a costly and not always promising process. According to legal rights, the trader will have to pursue brokers in court, taking into account the company's place of registration. Find below what can be done in such a situation, we'll talk about Visa and Mastercard Chargeback process.
Which is the best way to get money back?
In truth, forex scammers could apply commodity fraud, using the peculiarities of local legislation and the casuistry of the proposed agreements. As a result, trader could lose his deposit or profit.
Some of them have too many signs of scamming going - such companies are created to attract a certain amount of funds, after that the legal entity is closed down and the founders disappear.
Although online brokers provide their services more than 20 years, there are huge number of complaints about the non-payment of money affected both popular brands and unknown companies, firms with “reliable” U.S. licenses and firms with certificates of countries that you even can't find on the map.
Traders try in various ways to “fight” for stolen, in their opinion, funds, including hiring lawyers and lawsuits on offshore islands. The only effective option for the return of the deposit is the chargeback - a forced transaction reversal initiated by international payment systems.
Chargeback - anticipations vs reality
In order to simplify customers' lives and to make non-cash retail mutual settlements safe, Visa and Mastercard have invented a procedure for protesting and returning funds from dishonest vendors or service providers, including financial ones.
Good news for traders: brokers have to provide their rightness themselves
Bad news: the local bank determines the сhargeback rules, the limitation period extends to the payment, funds are returned only in the amount of the transfer (you should forget about the profit).
A trader who discovered at some point Balance reset should write an application to the bank, indicating the dates and amounts of the transfer of payments. The bank appeals to the local branch of the acquiring bank, which holds back these funds from the company's current account.
However, in practice, the broker has only to bring a copy of the contract, pointing to the section "Risks" and the litigation will be completed in his favor.
It should be understood that by depriving a trader of a deposit, the fraud company risks to lose forever the possibility to cooperate with Visa and Mastercard.
Therefore, the theft of funds takes place according to advanced schemes, in which the “complainant” will be in a losing position:
The use in the scheme of legal intermediaries, who transfer the client’s funds to the broker under processing contracts. In this case, a refund is possible only if the broker did not receive funds.
Transfer of funds via the legal payment electronic systems;
Liquidation of a legal entity or withdrawal of assets from a current account.
Chargeback does not provide for liability of third parties, therefore the lack of a proven connection of the broker with the payment e-wallet will automatically make senseless the procedure for claiming a lost deposit.
Return of funds stolen by a broker is relatively simple in the following cases:
Non-payment of income on broker’s investment instruments;
Refusal to return a deposit that was not involved in deals.
Problems with the return of funds due to a broker offer
A trader obtains an access to trading in the Forex market by signing the Agreement or acceding to the offer - the broker’s standard conditions.
Inattentive learning of trading conditions could lead to loss of funds and the right to return them if:
The client lost money as a result of the forced closing of positions, as Margin Call level was reached;
Client missed the deadline for appealing the loss due to the spike - technical failure, which led to the transmission of non-existent courses;
The loss was written off because of the nuances of the structural products (for example, they were converted into national currency and the funds were lost as a result of the crisis).
Loss of funds due to penalties for wrong adding funds (for example, frequent withdrawals and deposits without commissions).
Write-off of profit due to the high-frequency trading.
Therefore, before the Chargeback, you should carefully learn the reasonable response of the Support Service, which usually contains clauses of the Contract or an offer.
Chargeback from a consumer's bank card
Each bank has its own method of calculating chargeback and a developed over the years strategy to deal with various cases.
The first thing that a client should learn is that he became a victim of improperly provided financial services. Try to learn the rules for returning of the selected payment system and find a suitable description in Chargeback reason codes for MasterCard and Visa. This formulation will be presented to the broker by the acquiring bank when the application is registered by the card-issuing bank.
Before contacting the emitting bank you should prepare a package of evidence. In addition to the list of documents listed in the bank’s instructions, you should add screenshots of correspondence with the broker, which refused to withdraw the deposit. Also you have to prepare a copy of the Agreement (download from the website), and try to find clause in contract that prove the broker’s wrongness, if there aren’t, simply point to the section “Company Responsibilities” and “Client Rights”.
While preparing a package of documents, do not forget that time limit to chargeback cannot exceed 540 calendar days from the transaction processing date. Remember: the initial decision to start the Chargeback is made by a local bank. If the bank accepted the claim, then the second stage begins - the proceedings between the acquirer bank and the broker.
The trader will receive an official response and evidence of argument in the case of refusal. After that, if he will find new circumstances, he is able to file a complaint again.
To be continued...