In a world where customers of foreign exchange services increasingly need an independent arbitrary body, the Forex Peace Army’s forums have turned out to be one of the main places to go to find independent information.
The forum’s reputation amongst retail clients has been strong, however some brokerages are questioning whether the body is truly independent. To gain an inside perspective, of the dealings of Forex Peace Army our reporters have reached out and spoke with Romas Jurevicius, Forex Peace Army’s Partner, for his perspective on the methodology and evaluation process the group takes with foreign exchange (FX) brokers.
Mr. Jurevicius explains in detail a variety of challenges and methods which Forex Peace Army faces and utilizes:
What is the nature and process by which you evaluate brokers?
In most cases, the evaluation is left to reviews submitted by clients. The Forex Peace Army has the largest and best collection of human moderated forex reviews in the world. The reason for moderation is to greatly reduce the number of fake reviews, both by companies and by their clients.
When companies get complaints, the Forex Peace Army tries to help resolve the issues. The response or non-response of companies then becomes part of the evaluation process. When companies in the industry don’t treat their clients honestly, the Forex Peace Army takes steps to warn traders.
Are there any specific practices or strategies you would recommend to regulated or conversely unregulated brokers?
First, take care of your clients, then educate and inform them of your policies. Also never pressure them to deposit more than they are comfortable with. Next, never make promises your company cannot keep. Finally be active in public media and on our site. If you get negative reviews – add comments to them and address the issues. If we get complaints about your company we will invite you to explain your side of the story – make sure you are active and responsive.
We had cases when company reps were really unprofessional and unethical or simply ignored all our invitations to explain the matter. We had no other choice but to put a warning on their review page. And only after this company management would find out there were complaints… So make sure you have registered company rep within our page – in case we get any complaints we will contact the rep immediately. Don’t try to fake reviews, don’t try to buy them – we will find out and once we do we will put a warning on your review page. And never ever threaten, nor try to bribe us – it definitely won’t help you. For unregulated brokers, get regulated.
What is your opinion surrounding the effectiveness and legitimacy of specific worldwide regulators, i.e. FCA, CySEC, etc? Are there any that stand out as being the best or lacking?
Nearly all regulators are very slow. Brokers know that all they have to do is throw some delays in front of clients and some of the clients will give up. Unethical brokers can take advantage of this by only acting in a client’s interests when the client appears ready to take the case to the regulator. Similarly, there are some brokers that only respond to client complaints at the Forex Peace Army when a Traders Court case goes public.
One improvement noticed recently is that CySEC appears to realize that lax enforcement has allowed many CySEC regulated companies to do terrible things to clients. CySEC fines and suspensions have become more common, and clients are being referred to the Cyprus Financial Ombudsman. CySEC still lags behind the regulators in the US and UK, but has clearly shown that it is willing to do more than the very poor regulation in New Zealand.
Many cite the US FX market as a paradigm for overregulation, is this a valid stance or one that’s needed elsewhere in other jurisdictions?
The NFA and CFTC regulation of US brokers is a model both for client protection and client over-protection. Banning hedging, tightly limiting leverage, and having FIFO rules is in conflict with the systems used by many forex traders. What other jurisdictions could learn from is the regulation limiting the amount of time a broker has to cancel a trade due to pricing errors. They could also learn from the slow, but very effective actions the CFTC takes against scammers.
How has your business manifested itself into its current model today?
In 2005, Dmitri Chavkerov began sharing his personal experience with companies online. A few companies had stolen his money and he simply wanted to warn other traders about them. In 2006, he moved this to ForexBastards.com and opened the reviews to other traders to share their experiences.
In 2007, instead of just labeling companies as scams based on undocumented trader complaints, ForexPeaceArmy.com was born. The mission was not just to investigate and verify scam complaints, but also to try to resolve complaints whenever possible. This later expanded to the FPA Traders Court in order to give companies more chances to fix issues before getting a SCAM label.
The Forex Peace Army also rolled out Performance Testing. Currently, the FPA conducts forward tests of EAs, Signals, and Managed Account services, all on live accounts with all data taken directly from the broker.
The forums have recently been moved to a new and more modern platform. An improved front and back end for the FPA review system is currently under development. This will improve the user experience by making more information about a company readily available from the review page. It will also make attempts to manipulate the system with fake reviews more difficult and less effective for the occasional fake, which does slip through.
What is the most interesting and/or threatening interaction you have had with brokers?
Some time back, one company threatened to put a bullet into our founder’s head if certain comments were not removed from the site. Those comments were left in place. Much more recently, Reza Mokhtarian of Capital Trust Markets made a long series of threats against the Forex Peace Army as well as its employees. After repeated lawsuit threats failed to get him the total control of what could and could not be said about him and his company at the FPA, he went further. He threatened to unleash close to 5 million of his claimed online followers and other means to attack the FPA. He also threatened to hack the FPA’s website. He claimed to have personal information on FPA employees. When that failed, he threatened to somehow use the hacker groups Anonymous to take the FPA’s databases.
After that failed, he claimed that some crazy hackers who weren’t working for him had all the personal information of FPA employees and would “destroy” people if all information about him and his company wasn’t removed. You can read all about this and his most recent threats here. And this is just one out of many similar cases.
What was the impetus behind becoming more visible in the industry?
Uncompromising courage and honesty, which won market’s trust. FPA has never ever deleted anything for money or because of a threat. And we do get quite a few bribe attempts and a lot of various treats, starting from “we will sue you” to anything like “we will hire a hitman to shoot you”.
Forex Peace Army has had this approach for over 10 years now. During this period we have brought to the market perhaps the most raw, most honest and most transparent reviews, and people definitely felt it, trusted FPA and still continue to feel that and trust FPA.