Learn how to identify and prevent one of the most common types of fraud in the FX industry with DB Investing
Forex trading is a popular and lucrative activity for many investors around the world. However, it also attracts fraudsters who try to exploit the incentives offered by forex trading platforms, such as welcome, deposit, or rebate bonuses. This is known as bonus abuse, and it can have serious consequences for both the platforms and the legitimate traders.
Bonus abuse is a form of fraud that involves creating multiple accounts, using fake or stolen identities, and withdrawing the bonus money without engaging in any real trading activity. Bonus abusers aim to take advantage of the marketing campaigns and promotions that forex trading platforms use to attract and retain customers.
Why Is Bonus Abuse a Problem for Forex Trading?
Bonus abuse is a problem for forex trading because it undermines the integrity and fairness of the market, and it causes losses and damages for both forex trading platforms and their customers. Bonus abuse is a form of fraud that involves creating multiple accounts, using fake or stolen identities, and withdrawing the bonus money without engaging in any real trading activity.
Bonus abusers aim to take advantage of the marketing campaigns and promotions that forex trading platforms use to attract and retain customers.
Bonus abuse can harm forex trading platforms in various ways, such as:
- Wasting marketing budget and resources on fraudulent accounts
- Increasing chargeback rates and transaction costs due to fraudulent withdrawals
- Damaging reputation and customer trust due to poor service quality and security
- Facing potential legal and regulatory issues due to identity theft and money laundering
DB Investing’s Challenge with Bonus Abuse
DB Investing faces a daily challenge in maintaining bonus targets due to offering welcome bonuses and implementing strict rules to prevent bonus abuse. Unfortunately, the lure of these bonuses attracts bonus abusers who engage in fraudulent activities to exploit the system.
When we detect and offboard a bonus abuser, we cancel all illegitimate profits they have made through their activities. However, instead of acknowledging their wrongdoing, these individuals often resort to attacking our company by posting fake comments, attempting to intimidate and discourage us.
Islamic accounts
One tactic frequently employed by bonus abusers is the opening of Islamic accounts to evade paying swaps. However, they breach our Islamic account rules, further highlighting their fraudulent intentions.
How we create a safe and fair trading environment for our customers
Therefore, it is essential for forex trading platforms to detect and prevent bonus abuse as early as possible. At DB Investing, we have developed a comprehensive and effective strategy to combat bonus abuse and protect our clients from fraud. Here are some of the steps we take to ensure a safe and fair trading environment for our customers:
1. Use a fraud prevention platform that can spot connections between accounts
One of the key indicators of bonus abuse is the creation of multiple accounts by the same person or group. To identify these accounts, we use a fraud prevention platform that can analyze various data points, such as:
- Email addresses
- IP addresses
- Device fingerprints
- Browser settings
- Payment methods
- Behavioral patterns
By using a fraud prevention platform that can collect and enrich these data points, we can spot connections and similarities between accounts that may indicate bonus abuse. For example, we can flag users who have the same password, use the same device, or disable cookies on their browser.
2. Implement stronger identity verification checks
Another way to deter bonus abusers is to require stronger identity verification checks during the account creation or withdrawal process. This can include:
- Asking for personal information, such as name, address, phone number, etc.
- Requesting proof of identity, such as a photo ID, passport, or driver’s license
- Verifying the identity document using optical character recognition (OCR) or biometric authentication
- Sending a verification code or link via email, SMS, or phone call
- Using a third-party identity verification service or API
By implementing stronger identity verification checks, we can reduce the risk of accepting fake or stolen identities and increase the friction for fraudsters who want to create multiple accounts.
3. Reevaluate and adapt your bonus program based on your findings
Finally, we regularly monitor and evaluate the performance and effectiveness of our bonus program. We track metrics such as:
- The number of new signups and conversions
- The amount of bonus money claimed and withdrawn
- The ratio of legitimate to fraudulent transactions
- The feedback and satisfaction of our customers
Based on these metrics, we reevaluate and adapt our bonus program to find the optimal balance between attracting and retaining customers and minimizing fraud risk. We may consider:
- Changing the amount or type of bonus offered
- Setting different eligibility criteria or terms and conditions
- Introducing a minimum trading volume or time requirement before withdrawal
- Limiting the number of accounts or bonuses per customer or household
- Offering different bonuses for different segments or regions
By reevaluating and adapting our bonus program, we optimize our marketing strategy and reduce the incentive for fraudsters to abuse our bonuses.
DB Investing’s Bonus Terms and Conditions
Our bonus Policy:
5.2. The account where the bonus is loaded, must follow these rules:
5.2.1 Open at least 10 different instruments
5.2.2 At least 50% of the trades must be opened for 30 minutes or more.
5.2.3 At least 30% of the trades must be overnight.
5.3. The bonus cannot be added for a scalper account (accounts where over 50% of the trades are opened and closed within 30 minutes) or a mono-direction (where all the trades have just the same direction) and a few-instrument account (an account where are traded up to 10 different instruments).
5.4. If all these conditions (5.2 and 5.3) are not completed, the bonus will be removed, the account will be closed, the first deposit will be returned, and a penalty equal to the total profit will be debited.
5.5 Any indication of fraud, manipulation, cash-back arbitrage, or other forms of deceitful or fraudulent activity based on the provision of the bonus will render the account inactive along with any profits or losses accumulated.
Conclusion
Bonus abuse is one of the most common types of fraud in the forex trading industry. It can cause significant losses and damages for both forex trading platforms and their customers. At DB Investing, we are committed to providing our clients with a safe and fair-trading environment. That is why we have implemented a robust and effective strategy to detect and prevent bonus abuse on our platform.
By using a fraud prevention platform, implementing stronger identity verification checks, and reevaluating and adapting our bonus program, we ensure that our clients can enjoy the benefits of our bonuses without being exposed to fraud risk. If you are interested in learning more about our services and our bonus program, please visit our website here.
