We thought scammers are inventive and creative in the ways they try to fleece people but the ones we wrote about recently must be getting really lazy as the information they put on their websites with the exception of few tweaks looks alike. Iron-Bits is no exception.
Iron-Bits Regulation and safety of funds
Where this company comes from is anybody’s guess. We searched the information on its website but did not find any address or registration. Needless to say, trading with a non-registered broker will put your funds at risk.
We advise you to research our lists of licensed and reliable brokers from some of the well-established jurisdictions of the US, Australia, the EU and the UK. Trading with them is preferable as they are strictly regulated by the financial services authorities which provide many measures for protecting clients’ funds. For example, being well-capitalised in the US and Australia means that the broker will be able to provide some protection to the clients in case of unfavourable events. This is the reason why brokers from the US and Australia must deposit very substantial amounts of money in the form of initial capital. In the US it is $20 million and in Australia, it is 1 million AUD. The downside of trading with brokers from these two jurisdictions is that there are no compensation funds or schemes to reimburse the clients if the broker goes bankrupt.
On the other hand, in the EU and the UK, the amount of the initial capital is far less – only 730,000 EUR. However, forex brokers regulated by FCA in the UK must participate in the local Financial Services Compensation Scheme from which their clients can be repaid up to 85,000 GBP per clients in case of insolvency. If the broker is regulated by CySec and contributes to the local Investor Compensation Fund, its clients will be reimbursed up to 20,000 EUR per client if the broker goes belly up.
In addition to that, licensed brokers from these jurisdictions must keep their clients’ funds segregated with tier-1 bank establishments, provide protection against negative balance and report their transactions regularly for the sake of transparency and avoiding shady deals.
Iron-Bits Trading software
The trading software Iron-Bits offers to its clients consists of a web trader. In the image below you can see what the platform looks like. On the left, you have the menu with trading instruments which include indices, stocks, forex, cryptocurrencies and commodities. Each trading product is displayed with its bid/ask price. In the middle is displayed the chart of one of the forex currency pairs, EUR/USD with the fluctuation in its price in a given time frame. As you can see, the quality of the chart is somewhat dubious. From the bid/ask price of the same currency pair, we find out that the spread is 7.8 pips. This spread is too wide compared to the industry average of 1.5 pips. Such spread will make the cost of transactions too high and the traders won’t be able to make a sustainable profit. On the other hand, the broker who derives its revenue from the spread will get richer at its clients’ expense.
Another worrisome fact as we see it in the last image with the account types information is the high leverage which can reach up to 1:400. High leverage signifies only two things – a big win or a big loss. A big win is not likely to happen given the fact that statistically, 70% of traders lose in transactions. On the other hand, the high leverage will amplify the risk to which clients’ funds are exposed and will make the financial loss staggering.
We do not advise our readers to trade with such high leverage and to remember that licensed brokers in the EU and the UK will offer leverage up to 1:30 and in the US, up to 1:50. Capped leverage is one of the measures of preventing traders from trading recklessly and taking chance with their funds.
If you are looking for a trading software of good quality, let us tell you that a web trader doesn’t fit the bill. Instead, we advise you to find a licensed broker that will offer a MetaTrader 4 or MetaTrader 5 trading platform for they have a proven record of excellent performance and can satisfy even the pickiest of traders. For example, both platforms are equipped with an amazing package of trading tools and instruments, such as an app market, a financial calendar, VPS, code base with customs scripts, trading signals, auto trading option, etc. The charting options and technical analysis instruments are out of this world and help traders predict the future direction of exchange rates and make a profit.
Iron-Bits Deposit/Withdrawal methods and fees
Iron-Bits offers 4 trading accounts – Silver, Gold, Platinum and VIP. The minimum initial deposit for the Silver account is 250 EUR. The deposit and withdrawal methods are limited to payments via credit card, bank wire or Bitcoin.
The minimum withdrawal amount via Bitcoin is the equivalent of $250. For the other methods, it is 100 EUR/USD/GBP. The withdrawal fees are rather high – 1% with a minimum of 30 EUR/USD/GBP and a maximum of 300 EUR/USD/GBP.
A trading account that has not been used for 30 consecutive days, the company will charge 99 EUR/USD/GBP monthly fee. The fee is rather high and the period of inactivity is rather short. Normally, licensed brokers will allow for a period of 3 to 6 months before they charge any dormant account fees.
If you peruse the information on Iron-Bits website, you will notice that this broker offers bonuses. First of all, this is another sign that this broker is not reliable as licensed brokers do not offer bonuses or other incentives. Secondly, you must know that bonuses are funds belonging to the broker and as you can imagine said broker won’t part easily with its precious funds. So, do not be surprised that bonuses come with some hard to fulfil conditions attached to them that can seriously mess up your funds and withdrawal options. In this case, to be eligible to make a withdrawal or withdraw the bonus amount, the trader must execute a trading volume equal to 50,000 times the bonus amount. If you are naive and accept such conditions, we wish you happy trading!
How does scam work?
Actually, it’s quite simple and people often fall into the trap of experienced scammers. We bet you have seen those attractive ads on the Internet promising big and quick profits over a short period of time. Just provide your personal information, and voila! The scam brokers are waiting for you and you will be inundated with phone calls promising easy profit. Tempting, right? You think ‘ok, I can spend $200-300 and see what profit it brings me’. Congratulations, you just provided a fat commission for your scammers that will be distributed down the food chain. Now you have ‘graduated’ to be handed over to a senior ‘broker’, a smooth talker who will try to convince you that there is no more perfect time like now to invest more money. After all, you want to make more profit, right? However, something starts to feel off and now you start asking yourself questions and all you want is to withdraw your money and get out fast.
Unfortunately, it is too late! Someone has pulled the cheese and you are trapped because scammers don’t give up easily. Scammers will do anything in order to delay you so that you miss the deadline for a chargeback.
What to do if scammed?
Our advice is to immediately file for a chargeback if you have been lucky enough to make your deposit via credit card. VISA and MasterCard allow for 540 days chargeback period, so you still have a chance to get your money back.
Things don’t look so good if your currency of choice has been Bitcoin or bank wire. In that case, you may have to wave your money goodbye.
There are some other things that you can do in case of being scammed – cancel your credit card if you have given your CVV code to the scammers. Also, erase any software from your computer that gives scammers access to your private data.
Be warned, as well, that some so-called ‘recovery agents’ may approach you promising to recover your funds for a fee. It could be another form of scam where scammers prey on your misfortune. Should you choose to use one, you must make sure that you are dealing with a genuine and legitimate agency by checking their credential and company’s information and transparency.
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