The eToro Scam myth. A quick search on “Is eToro a scam?” brings up many results. This post today is to debunk some of these myths and to put your mind at ease. The majority of these cases are clients who have gone against the terms and conditions of using eToro. When these users are caught out, they are the first ones to cry out that eToro has stolen their money. This usually follows that the platform is a scam.
I’ve been on eToro for over 4 years now. I’ve seen several cases relating to this but they can be boiled down to these main categories
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67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Note that this does not apply to US Users and eToro USA LLC does not offer CFDs.
Security
eToro has several security measures in place to make sure that their client’s information is kept safe. Two key features are two-factor authentication and the SSL encryption
Always look for security signs on your browser before you trade. On eToro, clients’ funds are kept secured in tier 1 banks. All of their personal information is guarded under SSL encryption.
Adding the two form authentication adds another level of security. A one time code is sent to your associated phone number. This code allows you to log into your account.
Regulation
For a platform to be reputable, it needs to be regulated. eToro is regulated by the FCA, CySEC and ASIC. Your regulation is dependent on where you are located. Australian’s fall under ASIC (as do some Asian/Oceania countries) and the UK is with the FCA. Check your regulations for additional information here. So, is eToro a scam? Not likely.
Terms and Conditions
Where a lot of new traders come unstuck is not reading the terms and conditions properly. It is good to be familiar with the terms and conditions that apply to your account. For eToro, the terms and conditions can be found here. It covers traders in Europe, UK, Australia etc – you’ll just need to make sure you’re looking at the right one.
eToro deals a lot in CFDs. So you’ll need to understand what CFDs are and how they can impact your trading. New traders who are unfamiliar with it can quickly lose a lot of money, particularly if they leverage their trades.
Some traders take advantage of scalping, which is banned by eToro. If these traders are caught, they can be punished by eToro (freeze accounts/removed from the platform). Many people citing eToro as a scam platform didn’t read the terms and conditions of them signing up. This leads them to be frustrated if their account is restricted due to violating the terms and conditions.
eToro Scam – Money Laundering
A key feature of eToro is that the source of the deposit funds is the same destination as withdrawals. This is to prevent any money laundering. This is laid out when you sign up and highlighted in their terms and conditions. If you deposit Credit Card A , withdrawals will go back to Credit Card A. If that card is no longer valid/lost etc, you’ll need a letter from your financial institution stating that. You can present this to eToro and request a new withdrawal location.
Verification of users
eToro goes through a strong verification process to ensure that the trader is who they say they are. If they are unsatisfied with the verification, they can limit your account until such time you can verify your identity. This is to help reduce the number of scammers/money launderers trying to outsmart the system.
Press Releases for eToro Scam
Scams are usually reported. I’m not talking about someone who vents via Reddit or another online discussion platform. Check online to see if there have been any reports by credible sources regarding any particular platform. Top-tier publications, such as CNBC, TechCrunch, and The Telegraph have all covered eToro’s success in the fintech industry. So without evidence of eToro scam be wary of your news source.
Customer Support
eToro has round-the-clock support. The support team is available 24 hours a day on trading days. At the various Club Tier levels, you can be assigned an Account Manager. They can help address any issues you might be facing.
In our current work from home environment, the number of users of the eToro platform jumped significantly. With more users, brings more questions to Customer Support. There has been a slight delay in getting traction with questions due to COVID. eToro is working very hard to address these as quickly as possible.
Who uses eToro
You can opt-in for a private profile but you can’t become part of the Popular Investor programme. This means you can see real names and pictures of these traders. Something a lot of other trading platforms don’t have. Etoro encourages its users to share their real name and picture to ensure transparency. Moreover, depositing clients are subject to a strict verification process, making sure they are who they claim to be.
Technology and design
When looking around at different platforms, if the platform seems too complex to use, it probably isn’t right for you. Etoro’s simple interface offers some of the world’s leading fintech instruments, online learning courses, an innovative mobile app, a daily newsletter. Ask yourself, would scammers go to such lengths to benefit someone they are trying to rip off?
eToro Scam Risk awareness
eToro helps traders stay on top of their risk through different risk management tools. Any form of trading, be it traditional stockbroker trading, or Contract for Difference (CFD) trading, involves risk. eToro encourages its clients to take safety measures and provides various tools for reducing risk while encouraging responsible trading. Tools like Stop Loss, limiting leverage on new traders and the verification process are all tools to help eToro and the trader to get the best experience they can in line with their trading experience.
Owning up to glitches
Being on the platform for some years now, I’ve seen and experienced glitches that have happened to the platform. The one I remember the most was when everyone’s EOS trades were suddenly closed. eToro investigated, notified everyone what happened, reimbursed everyone and provided some compensation for those who were dealt with significant impacts. I haven’t come across an instance yet, where eToro was in the wrong and the trader wasn’t compensated for the inconvenience.
There have been instances where someone cried scam when one of their trades closed early but sometimes this is due to traders not understand stop-loss limits and the buying/selling prices that eToro has on their website. If you have come across an instance of where eToro was in the rug and they didn’t do anything about it, please let me know!
Not understanding how trading and leverage works
Regulated trading platforms cannot be scams since they act under strict supervision. Trading involves risk, and some people who lose money trading online are quick to blame the platform, calling it a “scam.” That is one of the reasons why eToro provides risk management tools and allows you to withdraw funds at any time. Trading CFDs and more specifically, CFDs with leverage is the number one reason people get upset with eToro as they don’t understand how it works. If you open a trade with x20 leverage, then expect some major swings. If that particular trade moves 2%, then that leveraged trade will move 40%. So whatever the movement is for that holding, multiply it by the leverage amount and it will tell you how volatile it could be.
Another example is people who try to execute a trade outside of market hours. If a trader does this, it becomes a market trade, where it will execute at the first possible chance when the market opens. So if you bought TSLA outside of market hours, seeing it jump 10% after hours, doesn’t mean you get the stock with 10% profit. It will open at the market price, then will your profit/loss journey with TSLA begin.
Final thoughts
Most traders who think they’ve been given the wrong end of the stick are those who have misunderstood the platform and the trading conditions. Some traders are upset about losing their money when they didn’t follow the terms and conditions of using the platform. I haven’t had an issue with anything I knew was a mistake on my behalf. Anything that was the mistake of eToro was quickly rectified and compensated.
So, my final piece of advice is to please read the terms and conditions, play around in the virtual account so you can get a feel for the platform and double-check that you’re not in the wrong first before you start pointing fingers.
Let me tell you right now I did a withdrawal they were supposed to put the money into my account they did not do that they took more money out of my account and this is 100% the freaking truth they are scam artists fucking thieves
Hey mate, sorry to hear this happened to you. Did you account for FX fees and withdrawals?
Obviously you haven’t tried to withdraw money. They simply will not transfer it without a fight. I am going to employ an asset retrieval company. So many people are having the same problem as me. They won’t pay you your money back.
I have withdrawn money, literally dozens of times and the only issue I had was when they sent it to an expired card – gave them the new bank details and it was in my account 3 days later.
Well there are many many people who are not getting their money. The site crashes continuously as of writing it has been down 4 hours. They close trades themselves, people cannot open or close trades and lose thousands. just check their facebook page and trustpilot.
I have been scammed by etoro too yesterday. They paid out my money today to paypal in less than 15 hours without any issues. But these may be due to paypal’s buyers insurance causing them trouble if they did not.
What happened to me, is that it was not possible to close several positions for more than 90 minutes and the NASDAQ was going down, meanwhile I saw my money burning. It is a big scam, they bet against their users and don’t let them close profitable positions until earnings transform into losses. I opened a thread on etoro, and received were 42 answers from other users facing the same issue. Some of them lost more than 3,000 dollars in one and a half hour.
The most annoying is, that I had set stop losses that would have closed the positions with a win if they were working. But they didn’t trigger. If have several screenshots since it happened with several stocks. Other stocks from NASDAQ were closable, only stocks that were falling, could not be closed.
German review sites are full of scammed people commenting the same issue regarding etoro and there is also people not getting paid their money out. I am glad I could make some profits despite of all, but would urge to stay away. They have liquidity problems nowadays and may lose a licence for the European market.
I am also a victim of EToro. The day before Memorial Day, they are claiming I signed in from a different IP address late at night and closed my positions which left me losing $600. I did not have a stop loss and they are not helping at all. They will not give me their contact info for a lawyer nor their US tax ID or address. I have contacted the SEC, FTC and my bank that was linked.. anything else I can do?