Scams, Myths & Reality Check · Beginner · 5 min
Fake brokers and recovery scams
You can describe how fake trading platforms and recovery scams work, name the warning signs and check a firm before sending money.
Looks real, isn't
The website looks professional. There is a trading app, a live chat and a friendly account manager who calls to explain the markets. The dashboard shows your money growing, week after week.
None of it is real. The lesson on red flags of dubious providers covered the basic patterns. This lesson goes one step further: how fake platforms keep victims paying, and how the same victims are often targeted a second time.
Invented profits, real losses
A fake trading platform is a website or app built to look like a broker, but which never places real trades. The money you deposit goes straight to the fraudsters. Everything you see afterwards, prices, trades and profits, is shown to you by their software.
The pattern repeats across countries:
- Contact out of the blue. An ad, a social media message, a dating contact or a "wrong number" text. The FBI's 2025 report describes investment scams that start this way and move the conversation to a messaging app.
- A professional platform. Sometimes it copies the name and details of a real, authorized firm. The FCA calls these clone firms.
- Fake profits. The dashboard shows gains to encourage larger deposits. The FBI notes that victims are shown fake profits and sometimes offered loans to invest more.
- Pay to withdraw. When the victim tries to withdraw, a tax, fee or insurance must be paid first. Then another one.
- A recovery offer. A recovery scam, as introduced in the accounts chapter, targets people who have lost money and offers to get it back for an upfront fee. The FCA notes that recovery rooms are often run by the same people as the original scam, or by others who bought the victims' details.
The scale is large. The FBI's Internet Crime Complaint Center recorded about 8.6 billion US dollars in reported investment fraud losses in 2025, the largest of all categories. It also recorded 10,516 complaints about recovery scams, with reported losses of 1.4 billion US dollars, which may include the earlier scams that led to them.
The defense is simple and works before any money is sent: look the firm up in the official register of your regulator, and contact it only through the details listed there.
Lost twice
A fictional victim meets a friendly contact online who trades "with a platform her uncle uses".
- The victim deposits 5,000. Within two months, the dashboard shows 11,000.
- A withdrawal request is answered with a demand for a 12% "profit tax" of 1,320, payable in crypto. The victim pays. Then an "anti-money-laundering fee" is required.
- The victim stops paying. The platform goes offline.
Four months later, a "recovery agency" calls. It knows the platform's name and the amount lost, and says it works with the authorities. It asks for a fee of 800 to start. Paying it would mean being scammed a second time, by people who may have bought the victim's details from the first group.
Common mistakes
- Checking the firm's own website. Check the regulator's register instead.
- Trusting a small test withdrawal. Some scams pay out small amounts to build trust.
- Paying fees to unlock profits. Real firms deduct costs from your balance.
- Answering recovery offers. Regulators and police do not charge you to recover money.
The takeaway
Fake platforms show invented profits and block withdrawals. Recovery scams then target the same victims. Check every firm in the official register first.
Check yourself
Quick quiz
4 questions. Instant feedback, nothing is saved.
-
1Tap the step that targets people who have already lost money.
Tap the chart.
Recovery scams follow the first fraud, sometimes run by the same people or by others who bought the victims' details.
-
2According to the FBI's 2025 report, how much did Americans report losing to investment fraud that year?
The IC3 recorded 8,648,617,756 US dollars in reported investment fraud losses for 2025, the largest category.
-
3A platform says you must pay a 15% tax before you can withdraw your profits. What does that suggest?
Demands for new payments before a withdrawal are a classic sign of fake platforms, and paying only increases the loss.
-
4Someone offers to recover your lost money for an upfront fee and claims to work with a regulator. What does the FCA say?
The FCA warns that recovery rooms often follow earlier scams and advises stopping contact if asked for a fee or financial details.
of 4 correct.