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24.09.2021

Forex Verification: What Should a Novice Trader Know?

Verification is a mandatory procedure that every client of a brokerage company goes through. This procedure is necessary to confirm a user’s data following the KYC/AML rules.  

Verification also allows a brokerage to keep itself safe from fraudsters. 

In some cases, you can register with a brokerage company without going through verification. In this case, customers just need to provide an email or phone number.  

Forex brokers may even allow a user to make a deposit and start trading. However, as soon as it comes to withdrawing funds, this option will become available only after confirming the client’s data. 

How Traders Pass Verification  

Clients should always read the conditions for passing the verification with a particular broker, as they can vary from company to company. Strict requirements are typical for brokerage clients. This way, companies provide a secure service that will not allow fraudsters to steal a user’s money even if they receive a login and password. 

IMPORTANT! You can withdraw funds from your Forex account only by using the same payment methods used to replenish the deposit. 

Some brokers still allow users to work almost anonymously and not go through the identification procedure. In this case, only a client is responsible for the security of personal and financial data.  

If a client has provided financial or personal data to make a deposit (without verification), the risk that third-party fraudsters will use the information is far too high. 

Verification Procedure Example 

The data verification procedure is as follows: 

⚪ Specifying email/phone number. A user who entered the personal account is provided with limited functionality. At this stage, a client can download a demo version of the trading platform, study the list of payments methods, or get acquainted with the T&Cs of the brokerage company. 

⚪ A trader uploads a scanned passport copy and fills in all the required fields. As the documents are uploaded, new functions and capabilities are opened to a user. For example, by uploading a passport, you can withdraw money. Meanwhile, uploading a document confirming the place of residence will allow you to receive funds after withdrawal within an hour. 

⚪ A broker confirms the accuracy of the information received and provides access to the full functionality of its services. 

The verification requirements among brokerage companies are almost the same. A client needs to provide a colored ID copy, while a document should have all the corners and edges of the lamination. Some brokers may require additional information to verify a client (e.g., a driver’s license). 

Types of Documents  

A client may be asked to send a scanned image of a document that confirms the owner’s identity at the first level of verification. Here you can use a copy of your ID or driver’s license. 

At the second level, a user may need more data, including: 

⚪ Bank statement made within the last three months 

⚪ Utility bill 

International brokerage companies require the translation of documents into English.  

Don’t even try to cheat brokerage websites. These companies have long learned how to recognize IDs edited in Photoshop. Note, inadequate information may lead to a permanent account ban. 

Summary 

Experts recommend that you first go through identity verification and only then replenish the deposit. It would help if you familiarized yourself with a broker’s rules in advance. Thus, you will not face any verification issues and can concentrate on trading. 

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