Broker doesn’t pay out – a nightmare for every investor. It’s as if the rug is being pulled out from under your feet.

The confidence placed in the market, based on smart decisions and strategic investments, suddenly seems to falter. The frustration, anger and sense of helplessness can be overwhelming.

But in the midst of this turmoil, there is a ray of hope:

The support of a skilled and reliable attorney. Our law firm has many years of experience representing clients who have been defrauded in online trading.

Use our contact form to request a free and non-binding initial consultation. We will discuss your individual case and advise you of all possible legal steps.

With the aim of getting your money back, we are at your disposal in Germany and other German-speaking countries.

You can find initial information on the following questions in this article.

What to do if the broker does not pay out? Are there any immediate measures?
How can I tell if my broker is a fraudster?
How can I recognize a trustworthy broker?
Are there good sources for assessing the reliability of a broker?
How does a broker scam work?
Broker demands taxes, proof of liquidity or mirror transaction – is he allowed to do this?

Broker does not pay out what to do? Immediate help for victims

Steps for affected investors:

Withhold your money: Avoid making additional deposits.
Document the case: Keep all documents and any communication with your broker.
Seek legal advice: Contact a specialized lawyer immediately.
Leave the discussions to the professionals: Have your lawyer handle all communication, be it with the broker or crypto exchanges involved.
Plan strategically: Discuss the next steps with your lawyer and consider taking legal action, including possibly pressing charges.

How does a lawyer help if the broker refuses to pay out?

There are a number of benefits for investors who seek legal assistance with problems with brokers or other financial services:

Professional expertise: a lawyer has the necessary legal know-how and can accurately assess complex issues in the investment sector.
Effective communication: A lawyer can negotiate with the broker or counterparty on behalf of the investor and effectively represent the client’s interests.
Assessment of the legal situation: An experienced lawyer can quickly assess the prospects of success of a case and show the investor realistic scenarios.
Time saving: Investors do not have to fight their way through the jungle of legal regulations themselves, but can rely on the expertise of their lawyer.
Psychological support: The support of a lawyer can have a calming effect and provide reassurance in stressful and emotionally charged situations.
Optimal enforcement of rights: A lawyer knows the best strategies and methods for effectively enforcing an investor’s rights and claims.
Protection against further losses: By seeking legal advice in good time, investors can often avoid further financial losses.
Network: A lawyer can draw on a network of experts, be it for expert opinions or for additional legal expertise.
Cost clarity: When instructing a lawyer, the client receives a clear statement of costs, which brings transparency to the process.
Confidentiality: All discussions and information exchanged between lawyer and client are subject to the lawyer’s duty of confidentiality.

Taking the proactive step of consulting an investment lawyer can therefore bring a number of benefits and offers investors effective protection of their rights.

Broker does not pay out? Experiences of clients

“While browsing Facebook, I stumbled across an advertisement promising me high returns if I signed up with a certain online broker. Attracted by the prospect of quick profits, I was persuaded and invested my money. Initially, everything looked promising, but when I tried to withdraw my profits, things became problematic. The broker kept finding excuses and eventually broke off contact completely.

In this precarious situation, I sought support from the Herfurtner law firm. They helped me tackle the problem, uncovered the broker’s lack of regulation and ultimately supported me in recovering a large part of my lost funds.”

“One day I received an unexpected message on WhatsApp. I was added to a trading group that was full of success stories and promises of profits. Curious and hopeful, I took up the offer. But after I had invested, the mood in the group became strange. I was urged to invest even more money and become a “VIP member” in order to gain better access to trading secrets.

Having become skeptical, I contacted the Herfurtner law firm. They helped me to realize that I had fallen into the clutches of a fraudulent WhatsApp group. Thanks to their expertise and support, I was able to take legal action and reclaim part of my investment.

This experience taught me to always be careful and not to blindly believe online promises. It is always advisable to seek professional advice before making such investments.”

Broker demands taxes, proof of liquidity or mirror transaction – is he allowed to?

Brokers have certain legal and regulatory obligations that they must fulfill, especially if they operate in regulated jurisdictions. Nevertheless, some requirements imposed by brokers may not always be justified or can be abused by fraudulent brokers. Let’s take a closer look at the above requirements:

Taxes:

Reputable brokers may require documentation related to tax regulations. These can be used to prevent money laundering or to fulfill tax obligations.
However, if a broker requires tax payments to be made directly to them, caution is advised. As a rule, taxes are to be paid directly to the relevant tax authority in the investor’s country and not to the broker.

Proof of liquidity:

Regulated brokers may require proof of source of funds to prevent money laundering and other fraudulent activities. However, this happens in advance of the investment, if at all.
However, the proof requested should be proportionate and in line with data protection regulations. Inappropriate requests could be a sign of fraudulent intentions. If proof of liquidity is requested as a condition for payout, this is investment fraud.

Mirror transaction:

A mirror transaction is generally a transaction that mirrors an offsetting transaction, making the net effect to the broker zero.
It is unusual and suspicious when brokers request such transactions without clear justification or in the context of a withdrawal request.

As a general rule, investors should be wary of any unusual or unexpected request from a broker. If you are unsure whether a broker’s requests are legitimate, it is advisable to seek independent legal advice, for example from a lawyer who specializes in financial services law.

Written assurance of payout by the broker

A written assurance of withdrawal by a broker is a formal document or communication in which the broker confirms the withdrawal of funds to an investor.

This can be an important safety measure for the investor, especially in cases where there are concerns about the reliability or liquidity of the broker.

However, it is important to be aware that such assurances are only as trustworthy as the broker itself. In the event of suspected fraud or problems with the broker, it is advisable to seek additional legal advice and contact the relevant financial regulators and an experienced lawyer if necessary.

Reputable, unprofessional or fraudulent: assessing brokers with confidence

Characteristics of reputable brokers:

Licensed and regulated: The broker has an official license and is monitored by recognized financial regulators.
Transparent fee structure: All fees and costs are clearly visible and comprehensibly explained.
Data protection: Highest standards of data security and compliance with data protection regulations.
Good customer service experience: Fast, competent and friendly customer support.
Established business history: The broker has been around for several years and has a positive track record.
Educational resources: Offering training, webinars and educational materials.
Positive customer reviews: Good reviews on independent platforms.
Segregation of client funds: Client funds are kept separate from the broker’s equity.

Characteristics of unprofessional brokers:

Poor communication: Difficult to reach and delayed responses.
Unclear fee structures: Hidden costs or unexpected fees.
Technical issues: Constant outages or problems with the trading platform.
Limited resources: Lack of or insufficient educational resources.
Insufficient information: Lack of transparency regarding business practices or financial products.

Characteristics of fraudulent brokers:

Lack of regulation: no license or oversight by a recognized financial regulator.
Offers that are too good: Promises of unrealistically high returns with no risk.
Unclear business address: Missing or fictitious contact information.
Aggressive marketing: Pressure on customers to invest a lot of money quickly.
Delay or refusal of payouts: Delaying or refusing payouts despite fulfilling conditions.
Price manipulation: Price manipulation to negatively influence customers’ positions.
Sudden loss of contact: After making a deposit, the broker is suddenly no longer available.
Lack of transparency: No clear information about fees, costs or terms and conditions.

How do regulated and unregulated brokers differ?

Regulated and unregulated brokers differ in several crucial aspects that affect both investor protection and the integrity and transparency of trading. Here are the main differences between the two:

Regulated brokers:

Regulatory authority: They are registered and licensed with one or more official financial regulatory authorities. These authorities monitor the broker’s business practices and ensure that they adhere to certain standards.
Transparency: They must meet certain reporting requirements, such as the disclosure of financial reports, to ensure financial stability and reliability.
Client protection: They are often required to keep client funds separate from the company’s operating funds, which ensures the protection of clients’ capital in the event of the broker’s insolvency.
Stricter business practices: They must offer fair prices and must not, for example, create artificial market movements.
Complaints procedure: In the event of disputes, many regulated brokers or their regulators offer a complaints procedure or arbitration service.
Education: Many regulated brokers offer educational materials, webinars and other resources to help educate their clients.

Unregulated brokers:

No oversight: they are not under the supervision of an official financial regulator, which means they are not subject to the same standards and regulations.

Risks: There is an increased risk of fraud as there is no independent body reviewing their business practices.

Unclear terms and conditions: You could have opaque or unclear terms and conditions that are detrimental to the client.

Limited transparency: You are not required to publish financial reports or other information that demonstrates the integrity and financial stability of the broker.

Uncertainty of client funds: There is no guarantee that client funds are held separately from operating funds, which could lead to significant losses if the broker becomes insolvent.

Lack of recourse: If something goes wrong, customers may have little or no recourse to bring their case or seek redress.

How does broker fraud work?

Broker fraud can occur in a variety of ways, with fraudulent tactics constantly evolving to deceive investors and illegally enrich themselves from their investments. Here’s a rough overview of how a typical broker scam can play out:

Bait-and-switch offers and advertising:

Fraudulent brokers often begin with persuasive advertising campaigns, whether through social media platforms, email marketing or phone calls. This advertising promises high returns with minimal risk.
For example, investors may become aware of the broker through a Facebook ad.

Registration and deposit:

Once interested, the sign-up process is often made as easy as possible for the investor.
After signing up, the investor is urged to make an initial deposit, often with the promise of bonus payments or other incentives.

Artificial profits:

Initially, the broker may pretend to make profits for the investor in order to build trust. However, these “profits” are usually not real and only serve to encourage the investor to make further deposits.

Withdrawal problems:

When the investor tries to withdraw money, problems suddenly arise. The broker may use various excuses, e.g. technical problems, missing documents or unfulfilled bonus conditions.
In other cases, investors could be added to a WhatsApp trading group that ultimately has fraudulent intentions.

Additional requirements:

In some cases, fraudulent brokers request additional payments, such as for taxes, fees or other made-up charges, before a withdrawal can be made.

Communication breakdown:

If the investor continues to push for a withdrawal or recognizes the fraud and threatens consequences, the broker may cut off communication entirely.
Eventually, the entire platform could go offline or the investor may simply be locked out of their account.

Realize losses:

In most cases of broker fraud, investors lose most or even all of their investment.

Anyone who believes they have fallen victim to broker fraud should act immediately: secure all communications and transaction receipts, make no further payments and seek legal advice, ideally from a lawyer who specializes in such cases.

Broker does not pay out: How can you recognize dubious brokers in advance?

Online brokers with questionable business practices can be identified in various ways. A first indication is, of course, if a payout is delayed or does not occur at all.

In addition, unwanted calls, also known as “cold calls”, are a warning sign of a dubious broker. This is a type of customer solicitation with the aim of attracting investors as customers of foreign brokers without a license through such contact.

Once the fraudsters have succeeded in turning the callers into customers, they use various tricks to defraud them. Affected investors often report that they suddenly have problems making contact after the money has been transferred.

In addition, investors are tempted to trade large sums of money by generous bonuses, which are usually offered by binary options brokers. However, these freebies often come with a long list of conditions.

There have been cases where traders have had to trade 40 times the bonus amount in order to receive their bonus money.

Investors should be extremely wary of such withdrawal conditions and avoid the broker in question if possible. There are also brokers who disappear from the scene as soon as investors demand their money back. At the latest when the money is not paid out, the broker becomes a fraudster.

Here are some rules to avoid fraud

Broker does not pay out: A situation that investors want to avoid at all costs.

Here are some practical recommendations:

Don’t believe empty promises.
Do not install any programs until you are absolutely sure that they are harmless for your computer.
Beware of software that claims to contain the secret recipe for success.

Other points that indicate a high risk:

There are obvious spelling mistakes on the website.
Commitment to profit, there is no balance between the presentation of the chance of profit and the risk of loss.
“Auto Trading”, “Robots” and “Arbitrage” are terms that should be viewed with some skepticism.

Identify fraudulent brokers and protect yourself.

In any case, check the following:

Is there a complete legal notice on the website?
Who is your contact person?
Where is the company’s head office?
Do not accept unsolicited advice (telephone solicitation, e-mail) regarding investment opportunities.
Make an effort to thoroughly understand the provider and their services.
Do not allow anyone to access your terminal via remote maintenance software.
Beware of identity theft: Do not send copies of your identity documents. Such requests are very common in these scams.
Is the company listed in the company database of the supervisory authorities in the EU member states or in the company database of the Federal Finance Agency?

Never follow empty promises that involve unrealistic profits as they usually avoid legitimate transactions. One of the most important aspects of avoiding fraud is to think like a businessman and recognize all potential pitfalls in advance.

Don’t make decisions under pressure, be sure to weigh up all the pros and cons of potential transactions in advance.

Problems with brokers during payouts are not an isolated phenomenon

The fact that requested payments are not made by the broker is a common phenomenon. However, brokers who try to obtain customer data by creating fictitious websites are also committing fraud.

Injured parties can also take civil action against a broker if it fails to meet its payment obligations. If a broker fails to make a payment, the first question the aggrieved party asks is how they are to get their money back. Investors who are unlawfully refused payment by a broker are entitled to compensation.

However, it is difficult for an investor who has lost money through an unauthorized broker to get their investment back. This is because many brokers are often subordinate to large companies, making it difficult to identify the exact structure of the organization.

In addition, the headquarters of fraudulent brokers are usually located in tax havens outside the EU, which makes it difficult to take civil action if a payout fails to materialize.

Manipulated trading software

The use of manipulated presentation software is very popular with fraudsters.

However, for fraudulent brokers, the demo account is fake software that simulates trading and always offers more profits than losses by “chance”. This creates trust. The customer feels like the best trader in the world, which motivates him to try it now with real money.

In the end, however, account changes and profits are merely faked by the platform operator’s fraud software.

What happens if a broker goes bankrupt?

If a broker becomes insolvent or goes bankrupt, there are various scenarios that can develop. The impact on investors and their capital depends heavily on the type of broker, the associated regulation and the existing protection systems.

Deposit protection: Many countries have deposit protection funds that protect investors’ deposits up to a certain amount in the event of the insolvency of a financial institution (which may also include brokers). This means that investors get their invested capital back up to this amount.
Segregated custody: Reputable, regulated brokers keep their clients’ funds separate from their own business assets. This means that in the event of the broker’s insolvency, customer capital is not part of the insolvency estate and is therefore protected from seizure.
Liquidation: In the event of insolvency, an insolvency administrator is often appointed to oversee the entire process. The administrator will attempt to liquidate the broker’s assets and satisfy the creditors (which may include investors) as best as possible.
Legal action: Investors can take legal action to get their money back. However, such proceedings can be time-consuming and costly.
Pay attention to warning signals: Signs such as late payouts, lack of communication or negative press reports can indicate financial problems with a broker. It is advisable to be cautious in such cases and possibly withdraw your capital.

The broker is based abroad – what opportunities are there?

Companies based in so-called tax havens usually have bank accounts that are subject to tax restrictions and only hold funds for a short period of time.

As the shady brokers are aware of their actions and face prosecution if they do not pay out the money, they seek refuge in tax havens and use false identities to disguise their true identity.

Victims whose online brokers do not pay out refunds can turn to the financial supervisory authorities and law enforcement agencies. This is because in some countries, victims of fraud have the opportunity to access specially set up funds.

You should also consult a lawyer who is familiar with the area of law in question and who will ideally ensure that the broker pays compensation.

If your online broker refuses to make a payment, we will be happy to assist you. Our lawyers will explain to you what legal options you have and how you may be able to get your money back.

We work across borders for clients who are based in Germany, Austria or Switzerland. Would you like to talk to us about online trading? Then you can access our contact area here.

Are there good sources for assessing the reliability of a broker?

Yes, there are several ways and sources to assess the reliability of a broker:

Regulatory authorities:

Check to see if the broker is licensed and regulated by a recognized financial regulator, such as the US Securities and Exchange Commission (SEC), the UK Financial Conduct Authority (FCA) or the German Federal Financial Supervisory Authority (BaFin). Regulated brokers must meet strict standards and therefore generally offer more protection for investors.

Broker review sites:

There are numerous websites that offer broker reviews and user feedback. Sites such as Trustpilot can be helpful, but it is important to note that both positive and negative reviews can be manipulated.

Forums and discussion platforms:

Websites and forums offer discussions about different brokers. By reading user feedback and discussions, you can often gain valuable insights into other investors’ experiences with specific brokers. But again, consult other sources as well. There are online trading scam platforms that buy and manipulate reviews.

Recognized financial news sites:

Trusted financial news sources such as Bloomberg, Reuters or Financial Times often report on major events affecting brokers, including legal issues or scams.

Possible warning signs:

A broker that promises unrealistically high returns, engages in aggressive marketing, fails to mention any risks, or pressures you to deposit money should be viewed skeptically. Social media advertising on Instagram or Facebook and MLM marketing with promises of quick riches with zero risks and portrayals of a luxury lifestyle are often advertising tactics used by scammers.

Legal advice:

If you have any doubts about the reliability of a broker, it may be useful to consult a lawyer or an advisory firm specializing in financial services. You can also search our blog for your provider. Here we report daily on online trading platforms that investors have warned us about, for which official warnings have been published, which operate unregulated or which do not have legally required information such as imprint, terms and conditions, registered office and contact details on their websites, which can be a sign of dubious business practices.

Conduct your own research:

Finally, you should always do your own research. Check the broker’s legal status, trading conditions offered, fee structures and customer service before making an investment decision.

Broker warning – BaFin

Blacklisted brokers – is there such a thing? In fact, consumers have the opportunity to find out about “black sheep”, i.e. dubious providers of online trading platforms.

The German Federal Financial Supervisory Authority regularly publishes warnings about online brokers that can be classified as dubious. The authority collects its information on a specially set up website, which can be searched for specific terms.

There is also further information from foreign tax authorities or law firms on the subject of “brokers not paying out”. It is therefore advisable to research a provider on the Internet in advance if you intend to use your money for online trading.

We also report on current offers from providers on our Herfurtner law firm website and carry out a legal assessment.

Broker fraud what to do? Money back

Your broker refuses to pay out?

Despite a clear request to pay out your profits, your broker remains inactive?

Is he constantly inventing new excuses for not paying out your money?

Does he demand additional payments from you, be it in the form of so-called taxes, fees or proof of liquidity, before you can access your profits?

Has your broker suddenly disappeared from the face of the earth?

Are you experiencing inappropriate treatment, insults or even threats from your online broker?

In these cases, you should exercise your rights as a consumer and follow these instructions.

Do not make any further deposits.
Contact a lawyer and describe your experiences.
If necessary, with the help of a lawyer, file a complaint of fraud with the police.
If the suspicion of fraud is confirmed, there are various civil and criminal legal steps that a competent lawyer will assess and utilize.

In recent years, our law firm has already been able to help many clients to recover money or at least partial sums that were thought to have been lost.

Broker does not pay out – what to do?