Working at MyChargeBack is like a crash course in online investment scams. On the one hand, we have to keep up to date on the latest scams. If we didn’t, how could we help our clients get their money back? On the other hand, once we have a client on the line, that can be quite an educational experience all by itself. After suffering severe financial and emotional damage at the hands of a shameless thief, it can be a relief to finally have someone on the line who actually wants to help.
One of the things we’ve learned is the prevalence of churning as a money stealing tactic. But what is churning?
In brief, churning happens when brokers take advantage of their commissions by executing lots of trades that the investor may not know about, or even against the investor’s wishes. It is a classic example of conflict of interest.
One of the functions of a financial regulator, such as the U.S. Commodities Futures Trading Commission (CFTC) or the Financial Conduct Authority (FCA) in the United Kingdom, is to monitor the conduct of brokers and other entities selling regulated financial products to make sure that any conflict of interest is eliminated, or at least mitigated, and fully transparent.
But scam brokers plying their sinister trade on the high seas of the internet are not regulated and have no qualms about presenting themselves to their customers/victims as friendly economic partners, working together for the benefit of both sides. The reality is all too often the very opposite. The broker’s profits simply equal the investor’s losses.
In that case, the goal from the very beginning is to separate you from your deposits. Clearly then, every last clause in the brokerage’s terms and conditions is written with that in mind. So, if the broker charges a commission (or whatever he chooses to innocently call it) on every trade, it is obviously in his interest to make sure to maximize the number of trades that take place. By putting in massive amounts of buy and sell orders, a fraudulent broker can consume the profits even of a successful investor.
So that’s churning. We’ve had hundreds of clients inform us about their experiences having their accounts frozen — sometimes explained as a supposed “glitch,” other times as a punishment for some ostensibly prohibited activity — and being forced to watch as unautherized and unwanted new trades tank the account. They even describe for us the agony they felt when they demanded that all buying and selling stop immediately, only to see more and more trades pushed through. And the broker always has an excuse.
The good news is that MyChargeBack knows what to do about it. We know the laws, regulations and policies that can be put to work for scam victims. As a result, over the last three years we have recovered more than $11 million for clients in more than 100 countries, and have dealt with in excess of 750 banks to do so. It’s a proven track record of success.
If you’re a trading scam victim, contact MyChargeBack today for a free fund recovery consultation.