Investing and trading have never been more popular. Even before the COVID-19 pandemic began, more people were trading with online brokers, even those who were new to investing. The online trading market is growing at a rate of 5.1% per year and its total amount of investments is projected to rise from $8.7 billion in 2021 to $12.16 billion in 2028.
Of course, as demand for online trading grows, more brokers are appearing on the scene. This is good and bad news for traders. Since not all of these brokers are going to be able or willing to obtain licences from the FCA, a requirement for all brokers who work with UK-based clients, there are likely going to be even more unregulated brokers and dodgy forex and crypto trading schemes in the future.
Traders must do their own due diligence and research brokers carefully before opening brokerage accounts. There are many reliable FCA-regulated brokers who provide value to their clients. Also, many unlicensed brokers advertise quick trading deals on social media and may end up pocketing the funds. The intermediate scenario–disputes with brokers who may or may not be licensed but are willing to communicate–also requires preparation, and in some cases, fund recovery assistance.
MyChargeback UK professionals are well-versed in the chargeback process. We consult with clients and assist them in gathering evidence and presenting a claim. We have extensive experience working with complex transaction disputes and are familiar with how regulators and banks deal with these cases. Our expertise can improve your chances of success.
How Do Broker Disputes Arise?
You may be working with a licensed broker who gives you all of the information you need, provides guidance and allows you to withdraw money when you request it. This broker may outline all of the terms and conditions carefully and abide with them. It is unlikely you will have difficulties with this type of broker.
At the other end of the spectrum, you may decide to take the risk on a deal advertised by an unregulated broker on social media. They may disappear with your money and refuse to communicate further. It can be difficult to recover your funds because they have cut off all communication and it is hard to locate them.
In between these two extremes are brokers that may or may not have licences. They may charge you higher spreads than what was initially agreed on. You may request your money back and they are unwilling to release your funds. Other disagreements can arise, but since they are willing to communicate and in some cases, negotiate, this is better categorised as a broker dispute.
How Are Broker Disputes Resolved?
Broker disputes are often resolved through direct communication with the broker. Failing this, a complaint can be filed with the regulator that issued the licence. If the broker is not licensed, a complaint can be filed with a government regulator or ombudsman.
Often direct negotiation is possible in a broker dispute without having to go to the regulator. This is often successful if the broker is licensed and does not want to have their licence suspended and is eager not to harm their reputation. It is difficult for people who are new to trading and dealing with brokers to succeed in negotiating these broker disputes, and the assistance of professionals is often needed.
Sometimes direct negotiation with a broker will not work, even though it should be the first step. If no agreement is reached between the customer and the broker, it may be necessary to approach the regulator or the ombudsman. This means filing a complaint and providing evidence, making a case similar to a court proceeding.
The manner of the complaint sometimes depends on how the transaction was made. For instance, if the client paid by credit card, it may be necessary to file a credit card chargeback request with the issuing bank while filing a complaint with the regulator. In these cases, the regulator or bank will ask for evidence from both sides and decide on a resolution. In some cases, the broker dispute could be taken to court.
How to Win a Dispute with a Broker
Given the rising popularity of online trading, more disputes are arising between clients and brokers. Regulators and banks, as a result, are often swamped with cases. To ensure that your claim is given priority and has a chance of success, follow these tips:
- Try to negotiate with the broker first
- Ensure the complaint is filed correctly
- File a complaint with the right authority
- Collect plenty of evidence
- Have patience
- Consult with a chargeback professional
Negotiating with the broker first is not only a good idea, it is required in many cases. For instance, if you file a credit card chargeback claim, the issuing banks will often ask if the customer addressed his or her concerns to the merchant or broker before proceeding. Regulated brokers do not want to jeopardize their licences or reputation and will often settle.
If you have to file a complaint with a regulator, make sure you are dealing with the right office or bank. There are specific instructions on filing complaints and it is essential to follow these to the letter. Even a minor error in filing can disrupt the process.
You will be asked to present proof to back up your claim. This means collecting records of communication, screenshots of platforms and websites, and any other evidence that will back up your complaint and strengthen your case.
Remember to have patience during the process. Often, it takes several different approaches or strategies to succeed. You can greatly increase your chances of recovering funds by seeking the assistance of chargeback professionals.
MyChargeBack UK is staffed by experts who understand regulators and banks and can negotiate your position. We have the resources, knowledge, and tools to improve the odds that your case ultimately will be successful.
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