Futures, CFDs and spread bets are high risk; most retail traders lose money. Education only, not advice. Risk warning

Good Trading Guide

Trading Scams to Avoid

Module 2: Brokers, Accounts and Platforms (UK) · Lesson 8 of 11 · Back to course

Trading attracts scammers because it promises what people want to hear: fast money, from home, with “no experience needed”. Scams are often slick, patient and personal. Intelligent, careful people fall for them every week. This lesson walks you through the most common types, the red flags they share, and exactly what to do if something doesn’t feel right.

The red flags almost every scam shares

If you see any of these, stop:

  • Guaranteed or very high returns – “5% a week”, “risk-free”, “we never lose”.
  • They contacted you first – a cold call, a social media message, a WhatsApp or Telegram invite, or a “wrong number” text that turns friendly.
  • Pressure and urgency – “the offer closes tonight”, “only three places left”.
  • Payment in unusual ways – crypto, gift cards, transfers to personal accounts or to a company with a different name.
  • They want remote access to your computer or phone (“so I can help you set up”).
  • You can’t withdraw without paying a “fee”, “tax” or “insurance” first.
  • Secrecy – “don’t tell your bank, they’ll block it”.

A genuine FCA-authorised broker won’t guarantee returns, won’t manage your money on a spread betting account, won’t ask for remote access and won’t ask you to pay to withdraw your own money.

The most common trading scams

1. Fake brokers and fake trading platforms

A professional-looking website or app shows your “account” growing fast. Small early withdrawals may even work, to build trust. When you try to take out larger sums, there are excuses, fees, and then silence. The “profits” never existed.

2. Clone firms

Scammers copy the name, Firm Reference Number and address of a real FCA-authorised firm, but use their own phone numbers, emails and websites. Checking only the name on the register isn’t enough. See How to check a firm is FCA authorised.

3. “Account managers” and managed accounts

Someone offers to trade for you, or to guide every trade, often after you’ve deposited a small amount. They push you to deposit more, sometimes to “cover margin” or “unlock a VIP level”. Genuine retail spread betting and CFD accounts are traded by you. Firms that manage money need separate permissions – and still can’t guarantee returns.

4. Signal groups and “mentors” on social media

Paid Telegram, Discord or WhatsApp groups promise trade signals with screenshots of huge wins. Some are outright scams; many are simply unprofitable. Screenshots are easy to fake or cherry-pick. Under UK law, promoting investments without approval from an authorised firm can be a criminal offence, and the FCA has warned about illegal promotions by “finfluencers”.

5. Romance and “friendship” investment scams

A new online friend or partner – often met on a dating app or after a “wrong number” message – gradually introduces you to a trading or crypto “opportunity”, sometimes on a fake app. These can run for months and cause devastating losses.

6. Recovery scams

After someone loses money, they’re contacted by a “lawyer”, “recovery agency” or even someone claiming to be from the FCA or police, offering to get the money back – for an upfront fee. This is very often the same criminals, or others who’ve bought their list of victims. The FCA will never ask you to pay it money.

7. Robots and “guaranteed” systems

Trading robots (EAs), indicators or courses sold with claims such as “94% win rate” or “pass any prop challenge”. Claims like that can’t usually be verified, and a high win rate says nothing about whether a system makes money (see Why fewer indicators is better).

A five-minute safety check before you send any money

  1. Did they contact you? If yes, assume it’s a scam until proven otherwise.
  2. Look the firm up yourself on the FCA Firm Checker – type the address.
  3. Check the contact details match the register, then contact the firm using those details.
  4. Search the FCA Warning List.
  5. Talk to someone you trust before you pay. Scammers hate that.

Example: how a scam unfolds (illustrative)

This example is made up for teaching purposes.

Mark in Swansea sees an advert on social media featuring a well-known celebrity “explaining” how they made money trading. He clicks, fills in a form, and gets a call within the hour from a friendly “senior analyst”. He deposits £250 and, over two weeks, watches his account “grow” to £1,900. He’s encouraged to add £5,000 to reach a higher tier. When he asks to withdraw £2,000, he’s told he must first pay a £700 “release tax”. He pays. More fees follow. The website then disappears.

Every red flag was there: celebrity advert, cold call, rapid growth, pressure to deposit more, and fees to withdraw. Genuine firms are allowed to advertise, but celebrities “endorsing” trading in adverts are very often fake.

What to do if you think you’ve been scammed

  1. Call your bank immediately, using the number on your card. You can also dial 159 from most UK phones to reach many banks’ fraud lines safely.
  2. Stop all contact and don’t pay any further fees.
  3. Report it to Report Fraud on 0300 123 2040 (England, Wales and Northern Ireland; it replaced Action Fraud in December 2025). In Scotland, call Police Scotland on 101.
  4. Tell the FCA on 0800 111 6768 or through its website.
  5. Beware of recovery offers that follow.
  6. Look after yourself. Losing money to a scam is not a sign of stupidity. If it’s affecting your mood, your sleep or your relationships, talk to someone. Our page on when trading stops being healthy lists free UK support.

Key takeaways

  • Guaranteed returns, cold contact, pressure and fees to withdraw are the classic red flags.
  • Check every firm yourself on the FCA register and confirm the contact details.
  • Recovery scams target people who’ve already lost money – the FCA never asks you to pay it.
  • If in doubt, stop, check, and talk to someone you trust. Report scams to your bank, Report Fraud and the FCA.

Quick quiz

  1. Name three red flags of a trading scam. (Any three: guaranteed returns, cold contact, pressure/urgency, unusual payment methods, remote access, fees to withdraw, secrecy.)
  2. What’s a recovery scam? (Criminals offer, for a fee, to recover money lost to an earlier scam.)
  3. Would the FCA ever ask you to send it money? (No.)
  4. Where do you report fraud in England, Wales and Northern Ireland? (Report Fraud – 0300 123 2040 or reportfraud.police.uk.)
  5. Why is checking a firm’s name on the register not enough? (Clone firms copy genuine firms’ names and FRNs; you must check the contact details too.)

Key terms

Clone firm · FCA Register · FCA · FSCS · FOS · Win rate

Try this

Write a one-page “money safety plan” and keep it by your computer: (1) I will never invest with anyone who contacts me first; (2) I’ll check every firm on the FCA register myself; (3) I’ll never pay to withdraw my own money; (4) I’ll talk to [name a person] before sending more than £[amount] anywhere; (5) phone numbers: my bank, 159, Report Fraud 0300 123 2040, FCA 0800 111 6768.

FAQ

Are all trading signal groups scams? Not all are deliberate scams, but very few show verified, long-term results. Treat any paid signal service with great caution, and remember that promoting investments without authorisation can be illegal in the UK.

I saw a celebrity advert about trading. Is it real? Very often, no. Fake celebrity endorsements are a common tactic. Check the firm on the FCA register yourself.

Can I get my money back after a scam? Sometimes, especially if you act quickly. Speak to your bank first – depending on how you paid, you may have rights to a refund. Be very wary of anyone else who promises to recover it for a fee.

Next: 2.9 MetaTrader 4 (MT4): a beginner’s guide → (coming soon)

← 2.7 Opening a demo account

Disclaimer: This page is general education, not financial, investment or legal advice or a personal recommendation, and it doesn’t take your circumstances into account. Examples are hypothetical, for illustration only, and not an invitation to buy or sell. Learning a strategy doesn’t guarantee profits. Past performance is not a reliable guide to future results. Futures, spread bets and CFDs are complex and carry a high risk of losing money quickly because of leverage, and most retail traders lose money. With a real futures account, losses can exceed your deposit. Only trade with money you can afford to lose, and speak to an independent FCA-authorised adviser if you’re unsure. Read our full risk warning.