The compulsory phone verification loop is a deceptive broker tactic where a trader is unable to access key account functions—including withdrawals, trading, or support—because the platform continuously requests phone number verification. Even after the trader submits the correct phone number and enters the received code, the system either rejects the attempt, claims the code is invalid, or fails to send the code at all. This creates a loop where the trader cannot proceed, trapping them indefinitely and delaying or denying access to funds.

This isn’t a technical glitch—it’s a designed obstruction to block withdrawals and frustrate traders into giving up.

How the Scam Works

1. Trader Signs Up and Trades Normally
The trader registers, completes KYC, and begins trading. They may deposit funds, execute trades, and even earn profits. At first, no phone verification is requested beyond the basic sign-up step.

2. Phone Verification Suddenly Required for Account Access
At a critical point—usually when the trader:

• Tries to withdraw funds
• Makes a large trade
• Attempts to change account settings

…the system prompts:

“Please verify your phone number to continue.”
“A verification code has been sent to your phone.”
“You must complete phone verification before this action can proceed.”

3. Verification Process Fails or Loops Repeatedly
Once the trader enters their number:

• No code is received
• The code arrives but the system says it’s invalid
• The verification submission fails due to “system error”
• The code is accepted, but the process restarts anyway

The trader is caught in a loop—unable to move forward, yet unable to resolve the issue.

4. Broker Blames Technical Glitch or Telecom Provider
When the trader contacts support, they receive explanations like:

“This issue is on the telecom provider’s end.”
“Please wait 24 hours and try again.”
“Our system is temporarily experiencing SMS delays.”

Support often offers no manual override or alternative methods for verifying identity. The trader remains locked out of vital account functions.

5. Withdrawal or Account Access Becomes Impossible
Because verification is mandatory to complete key actions, the trader is:

• Blocked from withdrawing funds
• Unable to trade
• Locked out of account settings
• Left in limbo without a clear resolution path

Eventually, some traders abandon the platform, losing access to both their deposits and profits.

Why This Scam Is So Dangerous

The compulsory phone verification loop is particularly harmful because:

• It mimics standard security measures, making it hard to detect as fraudulent at first
• It locks traders out of their own accounts, especially at the point of withdrawal
• It frustrates users deliberately, pushing them to abandon their funds
• It provides the broker with plausible deniability, blaming tech errors while continuing to stall access
• It violates trust and transparency, creating psychological pressure on the trader

This tactic weaponises basic security to disrupt account access and retain control over funds.

How to Detect the Scam

1. Phone Verification Suddenly Appears During Withdrawal
If you’ve been using the platform for weeks or months without phone verification, and it suddenly becomes mandatory only when requesting a withdrawal, be cautious. This selective enforcement suggests it’s being used as an obstruction.

2. Repeated Failure Despite Correct Input
If you consistently enter the correct number and code, but the platform rejects it or restarts the process, that’s a clear sign of a looped barrier. Technical issues may happen once, but not dozens of times over several days.

3. No Alternative Verification Methods Offered
Legitimate brokers offer fallback options such as:

• Manual verification by support
• Video KYC
• Email or ID-based alternatives

If support refuses all workarounds, the goal is likely to block access deliberately.

4. Support Avoids Responsibility or Resolution
If you contact support and receive:

• Vague answers (“Try again later”)
• Blame shifting (“It’s your carrier’s fault”)
• No escalation to technical teams

…it suggests the broker has no intention of resolving the issue.

How to Protect Yourself

1. Choose Brokers with Proven Platform Stability
Use brokers regulated by FCA, ASIC, or CySEC, which:

• Maintain robust platform infrastructure
• Must provide accessible and transparent verification processes
• Cannot withhold funds due to unverifiable technical issues

2. Complete All Verification Early
As soon as you open an account, proactively complete phone, email, and ID verification—even if it’s not required at first. This reduces the broker’s ability to spring surprise obstacles later.

3. Document Every Verification Attempt
Keep records of:

• Screenshots of verification attempts
• SMS timestamps
• All error messages
• Emails or support tickets related to the issue

This documentation is crucial if you escalate the issue to a regulator or dispute resolution body.

4. Request Escalation Immediately
If the loop persists beyond 24 hours, demand escalation to:

• The platform’s compliance department
• A named supervisor or case manager

Insist on an email summary of the issue and timeline.

5. Withdraw Funds Regularly
Minimise risk by withdrawing profits frequently. Don’t let large balances accumulate on the platform, especially if verification or withdrawal processes seem questionable.

Regulatory Expectations

Under rules set by MiFID II, FCA, ASIC, and CySEC, brokers must:

• Ensure clients have unrestricted access to legitimate funds
• Implement identity verification procedures that are reasonable, accessible, and functional
• Offer alternative verification methods if technical issues occur
• Honour withdrawal requests unless there is clear, documentable legal reason not to

Using phone verification as a tool to obstruct withdrawals is a violation of fair practice and subject to sanctions.

Conclusion: If You’re Stuck in a Verification Loop, Escalate Immediately

The compulsory phone verification loop is a modern scam tactic that turns a basic security feature into an obstacle to withdrawals and access. It’s a psychological trap, designed to frustrate traders and block capital movement.

To protect yourself, verify early, document everything, and escalate quickly if a loop begins. If the broker won’t resolve it, contact their regulator.

For more strategies on protecting your trading capital and identifying broker traps, enrol in our Trading Courses. We’ll show you how to trade smart—and never get locked out again.