How to check a suspicious broker — licences, identity and red flags

A scam can copy the licence number and website of a genuine investment firm. Check both the firm’s permissions and whether the offer really comes from that firm. A short checklist can expose a mismatch, but no five-minute test guarantees safety. Use independent official contacts before sending money, and do not treat a small successful withdrawal as proof of genuine trading.

Step 1: identify the firm and its permissions

Open your national regulator's register of authorised firms — in Poland the KNF entity search, in the UK the FCA Register, in Cyprus the CySEC register. Type the broker's name. There are three possible outcomes:

1. The firm appears with an active status — read the specific authorisation, services and restrictions. Match the legal name, domain and contact details to the offer; a genuine register entry can be copied by a clone.
2. An EU/EEA firm claims cross-border permissions — confirm the relevant authorisation and notification for your country and service. The UK FCA is outside the EU; its authorisation does not itself provide an EU passport. Even a valid notification does not authenticate the sender of an offer.
3. An overseas licence without matching local permission — verify the claimed supervisor and permission for the service in your country. An offshore label alone does not prove fraud or the absence of every complaint route; it does not confer an EU passport.

If a site prints a licence number, confirm which company owns it and check the contact details through the regulator’s official route. Scammers may invent a number or copy a genuine one. A claim that the official register is out of date does not resolve a domain or telephone mismatch.

Step 2: check the product, classification and leverage

Open the pricing page or the trading conditions section and find the maximum leverage on EUR/USD for a retail client. If you see:

• 1:30 - the ordinary retail major-pair CFD limit in the European intervention framework. Check current national rules, instrument and client classification. A matching leverage figure alone is not proof that a firm is authorised.
• 1:50 - a leverage figure cannot establish legality on its own. Check the exact product, client classification and rules applicable to the contracted entity and country.
• 1:200, 1:500, 1:1000 and above - identify the entity, product and client classification behind the advertisement. These figures do not match the ordinary European retail major-pair CFD limit, but the applicable rules cannot be inferred from the brand or leverage number alone.

High advertised leverage requires an explanation of the product, entity and client classification. Professional classification is an assessment process, not an automatic switch triggered by an advert. Mandatory retail CFD safeguards can cease to apply after a valid change of classification; voluntary protections and compensation eligibility must be checked separately. Do not infer legal status or a forced reclassification from one leverage number.

Step 3: examine the offer and contact details

Open the site and read the headlines. Warning signals:

• "Earn X% per month" — a promised return needs scrutiny. A headline is not evidence of achievable performance; check whether risks and the underlying service are accurately described.
• "Guaranteed profit", "risk-free trading" — close the tab. A licensed firm has to show a risk warning, not promise the absence of risk.
• "Premium signals from our experts" — verify the provider, the service and any necessary permissions. Selling a subscription does not itself prove either fraud or performance.
• "100% deposit bonus" - incentives for covered retail CFD trading are restricted under the European intervention framework. Check the applicable national measure and product rather than treating this as a worldwide ban on every promotional offer.
• An advert using a public figure’s image — verify the endorsement independently. Images and quotations can be copied or fabricated; celebrity involvement does not establish authorisation, suitability or safety.
• Typos, awkward translation or changing domains — clarify inconsistencies through official contacts. Language quality neither proves a local office nor authenticates a licence; polished cloned sites can also be fraudulent.

For covered retail CFD offers, check the risk warning required by the applicable national measure and product. A provider-specific loss percentage is not a measure of your personal chances or a certificate of authorisation. Missing information is a reason to pause, but a displayed warning can also be copied.

Step 4: distinguish reviews from evidence

Use review sources to collect questions for verification, rather than treating any platform as a trusted register:

1. Review platforms such as Trustpilot — note dated withdrawal complaints and their details. A star rating or an arbitrary count of posts does not establish a licence or prove what happened.
2. Country-specific forums — look for details that can be checked. Screenshots and a long thread may be useful leads, but neither proves that transactions occurred or that a contact is genuine.
3. International communities — use them to identify questions and reported problems. An international audience does not establish resistance to paid reviews or replace official verification.

Compare domain history with the claimed company history and ask about inconsistencies through the firm’s official contact. A new domain can accompany a legitimate migration or a clone; archive coverage is incomplete, so its first captured page does not by itself date the business.

Step 5: read the warning lists in context

Read the warning itself, including its company, domain, activity and jurisdiction:

• Your national regulator’s warning list — check the named entity and the subject of the warning. In Poland, KNF publishes notices of suspected offences and information on specified criminal proceedings. A list entry is not automatically a final conviction; absence from the list is not approval.
• IOSCO Investor Alerts Portal — a pooled database of warnings published by supervisors around the world. Type the broker's name and read the results. It often catches firms your own regulator has not got round to describing yet.

A third register is optional: the FCA warning list. The London supervisor publishes warnings very frequently, and many firms that approach European clients have entries there.

What to do if the broker passes all five steps

No mismatch found in this checklist does not certify the broker or require a deposit. Continue with the actual agreement, instrument and client-money arrangements, and preserve unanswered questions:

1. Use an available demo to learn operational controls if useful, and read about starting capital and risk. Demo duration does not establish the authenticity of a firm or readiness to deposit.
2. Do not send a test deposit merely to authenticate a suspicious firm. An early small withdrawal can be used to build trust before a larger payment. Verify identity and permissions independently first.
3. Read the execution policy and identify the counterparty, price source and handling of orders. An ECN or market-maker label alone neither locates every conflict nor proves authorisation.
4. Check whether client money is segregated and whether negative-balance protection applies to your entity, product and classification. European retail CFD measures include account-level negative-balance protection; do not infer worldwide coverage or its absence solely from a country label.
5. Identify the platform — MT4 or MT5, cTrader or another interface — and confirm it connects to the intended entity and account. A recognised platform does not certify the firm, and completing a checklist is not a requirement to fund it.

Someone else’s reported profit does not authenticate a broker or payment instruction. Verify the entity, service permissions and contact details independently. If another firm offers to recover a loss in exchange for an advance payment, pause and check for a follow-up recovery scam.