French Ombudsman Registers Drop in Regulated Retail Brokers Complaints

The ombudsman service for the French AMF has registered a drop in the absolute number of complaints.

Complaints against regulated retail brokers in France have declined for the first time in many years, a summary of the agency’s actions for 2016 shows. The news comes as France unleashed a big regulatory crackdown on the industry, banning advertising for companies that are offering high leverage products on the French market.

The Authorité des Marchés Financiers (AMF) has been on a crusade against the retail brokerage industry after receiving numerous complaints over the past several years. The French watchdog received a huge number of complaints from clients of both regulated and unregulated companies.

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Close to €800,000 have been recovered from EU-regulated brokers

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Last year, the AMF highlighted Cyprus as the destination of choice for many companies that have been behaving to the detriment of the interests of clients.

For last year, the number of complaints against regulated companies declined to 116 from a total of 132 in 2015. The regulator’s ombudsman arm made 78 recommendations on the basis of its investigations, 71 of which were in favor of the clients. As a result, close to €800,000 has been recovered, which is about 79 percent of the total amount of losses for which the regulator received complaints.

Diamond Fraud

The AMF has also highlighted a new type of investment fraud, where clients are convinced by offshore entities that they are purchasing real diamonds. A total of 22 complaints have been registered by the French watchdog on the matter.

The fake online diamond brokers targeting French clients have been promising unrealistic returns on the initial investment. The AMF warns that no contact has been possible with the entities that are engaged in the new type of fraud and cautions French residents to beware of such schemes.

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