eToro – A review
Sometimes it despite being well researched and doing due diligence, you can still be scammed by a broker’s scheme. Even legitimate licences brokers with professional looking websites and a good reputation can be revealed as fraudulent when you dig deeper into their ‘services’.
How can you find ways to differentiate between an honest broker and a scam in sheep’s clothing? And is Etoro a scam despite its good reputation online?
|Product Types||Forex, stocks, CFDs, Indices, Commodities|
|Products Offered||More than 1000 products to Trade|
An eToro overview
Etoro is an online broker which was first launched in 2007 by a group of Israeli entrepreneurs. They hold three regulatory licences, one from the Financial Conduct Authority, another from the Australian Securities and Investments Commission, and another from the Cyprus Securities and Exchange Commission. All three of these regulatory bodies are reputable and well established and generally ensure a good quality of service.
They have been in the industry for 14 years now, which would suggest a reasonable enough track record to be able to remain in the industry without being reported and investigated by the authorities.
They boast that their 0% commission fee for stocks and ETF’s and have received numerous positive reports and feedback from the media, including reviews from The Telegraph, Financial Times, Bloomsburg, and CityA.M.
So, what’s the catch. Whilst Etoro excels in manipulating their reputation to keep the appearance of a professional and legitimate broker, what they are unable to control is actual user feedback. The average Etoro client isn’t able to make reviews listed on the first page of Google; however, they can report to online review sites to share their experiences on the platform.
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Is eToro a scam?
If you were to place your trust in the first page of Google results, then no, a quick search would indicate Etoro to be a legitimate broker with a sparklingly clean reputation. But if you are still unsatisfied by this initial search and choose to dig a little deeper, then you will find client reviews, scam spotters reviews and more suggesting that Etoro is indeed a scam.
To begin with, let’s have a look at their Trustpilot page. 50% of all reviews rate their experience as bad. Even the reviews claiming Etoro to be a completely legitimate broker complain about the withdrawal time period however many users are reporting that they have made the initial deposit or have been trading with them a while, but suddenly they are unable to withdraw their money, and customer support is unavailable.
One customer complained that they had no problems until it came to withdrawal, they had waited 13 business days and 24 total days, but the money still hadn’t been returned to his account. Bear in mind that usually, brokers should be able to fully process withdrawal requests within 1-3 business days and not a month.
Of course, eToro claims that they cannot steal your money or scam you out of your savings since they are a licensed broker. But being a licensed broker doesn’t mean that they are incapable of fraudulent behaviour, be smart enough and con artists can pass undetected by regulatory officials.
Another suspicious feature is their inactivity fees; one reviewer claims that they are locked out of their account and keep being forced to pay inactivity fees because they haven’t logged in, but they cannot log in and as a result have lost $10,000.
If you visit another site, ForexPeaceArmy then overall the reviews come in negative with a 1.735-star rating. The reviews here a much alike to the ones on Trustpilot and claim similar issues with withdrawal, pricing errors, and blocked accounts.
Spotting scam brokers:
Here are some potential indicators which can help you identify scam brokers:
- the broker freezing or blocking your account
- login inaccessible
- money is taken out without your permission
- poor customer service
- pushy sales tactics
- bad client reviews
- vague information
- the broker claiming, they are not a scam
eToro, of course, claims that they are a legitimate broker incapable of committing fraud. They simply state that the clients giving them bad reviews have misunderstood the platform and the nature of high-risk trading practices. They even have a page showing clients how to avoid scams and why they are not a scam, which seems remarkably fishy that they have to prove that they are legitimate brokers and disprove clients reports.
This broker is cleverly disguising themselves as a professional well-regulated platform to distract from the overwhelmingly negative response from clients.
How can Trader Defender help?
Trader Defender is a due diligence service offering free consultations and due diligence business reports so that the average consumer and investor can make well-educated decisions. In cases like that of eToro, a full search is needed to fully assess the legitimacy of the business; luckily, this is what Trader Defender does best.
So if you have been scammed by eToro or are looking to invest or partner with a business but aren’t sure of their legitimacy contact us for our due diligence services so you can invest with peace of mind.