Many of these brokers have licensing problems. They may have no licenses or may be violating the terms of their licenses. One red flag indicating a possible financial scam is a broker that has no license. There is no reason a legitimate broker would avoid being regulated. 

Brokers that guarantee returns or claim to have no fees are making statements that mislead consumers. Exaggerations about credentials and ratings are also common statements that can lure customers until they discover they aren’t accurate. 

Before signing up with a broker, it’s important to find out the names of actual people who run the brokerage, their addresses, and contact information. Many of these brokers aren’t forthcoming about these details, and this is a red flag. 

Shady brokers often restrict transactions and charge inordinate fees for account maintenance. They may also not allow withdrawals without paying huge fees or unless traders make a certain amount of money. These practices aren’t legitimate and there is no reason to keep customers from using their accounts. 

FSMA flags brokers when they receive many complaints about them. These claims are examined and verified by the regulator before brokers are flagged on suspicion of fraud.