CFD TRADING SCAMS

We talk endlessly about CFD (contracts for difference) scams and how to avoid them. We’ve done surveys on what people do when they spot fake investment ads online, written guides about how to avoid getting hoodwinked by commission-driven advisory brokers, explained that trading educators are best avoided, yet still investors are being lured into offshore CFD scams


One of the major sources of these CFD scams is unregulated social media advertising. Even though Facebook, Twitter, Google have banned advertising CFDs for non-regulated brokers. Scam CFD adverts are still slipping through the net

What are CFD scams?

CFD scams are the contact for difference scams where a group of people sitting in a room are involved in cold calling and make their sales and persuasive powers to land various clients and pressurize them to trade more by using multiple speculations ad other convincing tools to upsell their clients and make them trade at higher volumes citing various perks and the advantages of investing in that point of time.


CFD trading is a lucrative way and uses the method of exchanging what you cannot own completely. Still, you have the option of selling and buying the purchase options, enhancing your portfolio, and increasing the wealth. Nevertheless, to operate CFD, you have to manage your numbers very effectively. You must conduct a proper CFD analysis and make sure what you are trading is something that can pay you well and don’t end up losing all you have. These are relatively close to the forex trading, the way you can be scammed through a forex scam, similarly the CFD scam can target you as well, and you can fall into this scam

How to identify a CFD scam?

As with all scams, common sense should prevail, but scammers are clever and are experts in either subtle or direct manipulation.

Keep these golden rules in mind if considering trading CFDs

If it sounds too good to be true it is.

Never trust lifestyle ads – CFD brokers are not allowed to adverts it as a lifestyle product. These are most likely from affiliate trying to get you to buy into their trading course or refer you to an offshore unregulated broker.

Cold calls are a warning sign. If you get a call from a pushy salesman, hang up and report them instantly. It’s an immediate red flag. Legitimate brokers do call new clients to welcome them to the service so not all calls from CFD brokers are a scam, but there is a clear difference between a welcome call and someone phoning you up on a crackly line to suggest you can “make a second income from forex trading”.

No risk warning. If you see online ads that don’t contain a risk warning avoid them and report them. We have covered in the past that the requirement for risk warnings leads to risk warning fatigue, meaning that people start ignoring legitimate adverts and being more inclined to be seduced by ads without a risk warning.

 No FCA regulation. Even though we just said that FCA is no guarantee something isn’t a scam – just look at London Capital & Finance and their £230m mini-bond scam. But it’s a good place to start your online due diligence.

Never bow to pressure. No legitimate CFD broker will ever pressurise you to open an account. The days of churn and burn clients are over. Decent CFD brokers want to form long term relationships with experienced clients.


What to do if you’ve been involved in a CFD scam?

You may have noticed that a lot of review sites and comments on social media say that someone has helped them get their money back from a CFD scam. Be careful with these as well. Many offer Gmail email addresses, invitations to connect directly through social media direct messaging or for callback