Scrolling through broker reviews is one way to measure the quality of a broker. However, not all reviews are genuine and reliable. So how do we identify fake broker reviews?
Deciding which forex broker to choose is never easy, especially if you do it alone. Beginners often experience the issue of finding the right broker because they're still not sure about what to look for and have no reference or recommendation. It would be very problematic if they end up choosing the wrong broker and got scammed. That is why doing a thorough research on forex brokers is an important step.
Essentially, there are many ways of sorting out the long list of forex brokers and choose the right one. You can check each broker's website and see what they offer, or you can get recommendations from other sources that write complete reviews about some forex brokers. Even though reviews are completely subjective, but it can be useful to learn about a broker's overall performance.
However, some sites may be affiliated with certain brokers and therefore have a very biased review with the end goal of making their readers open an account in their recommended brokers. Those kinds of sites can even go further by providing false information to make their affiliated brokers more attractive. Such reviews are highly unreliable and can be considered fake, which then leads us to this question: Is there any way to identify fake broker reviews?
1. Make Sure the Site Is Legit
There are many websites nowadays that claim to provide legit forex broker reviews. While some of them are true and dedicated to providing reliable information, some others are not what they said they are. These fake websites would lure the traders into reading false promotional materials about the brokers. Although the practice of such promotional campaigns is not illegal, it doesn't give any real answer to traders who want to learn genuine reviews about forex brokers.
These promotional websites are actually quite easy to identify. You can sort out such false information by taking a closer look at the website. If the first thing you see when you enter the website is a big list of forex broker reviews, then you should be cautious because it is possible that the site's sole purpose is only to gain money on their affiliates and not focusing on the up to date news.
Instead, you would want to see a comprehensive overview of the forex industry, including news and educational resources. Among that news, you might find a discussion forum that specifically talks about forex brokers. But if the main thing they provide is a hierarchical list of brokers, then it is most likely a list of brokers who pay them to be put up there.
2. Check the Reviewer's Link
Once you found the review page, try clicking one of the provided links that lead to the broker's official page. If you see something like "landingID=3", "ref=fxsite", or anything similar to that at the end of the link, then you can be sure that it is an affiliate link. This means the broker's reviewer gets paid for referring clients to the broker's website or that the reviewer receives compensation for writing a review about the broker's services.
Just like the promotional website we talked about before, paid reviewers are also not illegal. In fact, it is actually quite common. Many business owners use paid reviewers to spread awareness of their brand and gain more clients, but it becomes an issue when they hide this detail, which is considered unethical. If there's money involved in the process, then it is harder to make sure if the reviews are really genuine or just merely for the sake of increasing the broker's reputation. So in this case, the site owner should've stated the affiliation deal so the traders can judge for themselves whether the broker's still worth checking out or not.
3. Look for User Comments
Based on the two issues we discussed above, we know that transparency is the key to genuine reviews. If the site provides an option to add your own comment on the review, then that's a good indicator of transparency. Check the comment section to see whether it is active and packed with other people discussing the broker, so you know that readers can participate and state their opinions too. If you're still unsure, try the feature and add a comment yourself. See if your comment really appears on the site or if it's being held for moderation in an uncomfortably long time.
In some cases, the comments are immediately posted but are later deleted for being negative or too harsh. Such sites may seem transparent, but it's actually not. In addition, you can read through the comments that have been left there. Does it sound genuine and express someone's real opinion, or is it just a carefully written PR statement?
See Also: 4 Common Types of Forex Broker Frauds
4. Check the Forum Members
To make sure if the people reviewing and commenting on the website are legit real people and not some PR staff that are affiliated with either the broker or the site owner, you can check the members of the forum.
Some members would post a review and then added a recommendation of a forex broker in the end. Even without an affiliate link, it's still possible that he somehow is associated with the broker. If he officially states that he represents the broker, then you can judge him for yourself. But if he's not, you might want to check out other comments he left on the forum. If he's a regular participant and actively comments about his experience on other posts, he could be genuine. But if all he talks about is just a broker's positive side and he seems like promoting the broker a little too much, you better not trust his words.
5. A Balanced Review is the Key
When we talk about measuring the reliability of a reviewer site, it would be helpful to search for the balance between positive and negative commentaries. It is almost impossible for promotional websites and paid reviewers to mention a negative review about a broker. While a genuine reviewer can also leave a positive review and praise the broker for their services, they would state the reasons clearly instead of just saying how good the broker is, and maybe add some flaws that the broker has despite the other excellent services.
Keep in mind that getting negative results in the reviews does not necessarily mean that the broker is straight unsafe or bad. It shows the reality of how forex brokers offer their service; there will always be a trade-off that traders need to weigh on carefully. In fact, showing just the positive side of a broker is not realistic and may seem dangerous since it is just what a scammer would definitely do to attract clients.
See Also: 5 True Stories of Forex Broker Scams
Be Careful When Browsing the User Reviews
Scrolling through a whole bunch of comments and user reviews might be tiresome, especially knowing that there may be lots of unreliable and subjective statements. It might be hard to separate the negative comments that are based on something serious or just a result of disgruntled traders. This is where subjectivity plays its role. Some issues may look like a big deal when it's actually not, or it could be the trader's own fault, not the broker.
For example, complaints about having trouble with withdrawals are commonly seen as one of the characteristics of scam brokers. While this might be true in some cases, but the truth is there are several reasons why a broker may delay or even reject withdrawal requests. Even legit brokers do that if the conditions are not met. That is why you should be able to sort out the true negative reviews from the unreliable ones.
The easiest thing to do is to look at the majority of the reviews. If the people complaining about the broker's particular service outweighs the people who praise the broker, then it is most likely to be true. But if there are only one or two negative comments about it, then you should double-check the validity of the claims.
Another issue is that while that information may come from real experience from people who actually trade with the broker, some others may have written by paid reviewers or people who just merely want to either promote or spread hate to a certain broker.
To conclude, it is safer to understand that user reviews are not the only determinant of a good broker. There are a few other aspects that you must check out before considering the reviews from other traders. Also, it would be useful if you get a broker recommendation from someone you trust or from a more experienced trader.
Deciding which broker to choose is a challenging task, especially for novice traders. After you visit the broker's website and learn about the services they offer, it would be a good idea also to check the reviews, either from dedicated websites or from other traders who have registered with the broker service. However, pay attention to details and try to practice the abovementioned recommendations to rule out fake broker reviews from the real ones. Even after getting a seemingly good recommendation, you should try the forex demo account for a certain period of time before depositing your money in a forex broker.