In the world of trading, inactivity shouldn’t cost you a fortune. Yet some unethical brokers exploit inactivity by slapping traders with excessive dormant account fines, draining balances under the guise of “administrative maintenance” or “inactivity fees.” These charges often go far beyond industry norms and are designed to gradually erode funds, especially when clients are no longer actively monitoring their accounts.

This article exposes how this scam operates, the signs to watch for, and how traders can prevent their capital from being silently siphoned while they’re away from the markets.

What Are Excessive Dormant Account Fines?

Dormant account fines are fees charged when a trading account remains inactive for a certain period—typically 6 to 12 months. While some regulated brokers charge modest administrative fees, scam brokers use excessive, compounding, or hidden inactivity fines to:

• Punish traders who stop depositing
• Slowly drain accounts that are no longer monitored
• Avoid refunding balances by reducing them to zero over time

These fees can range from $50 to $200 per month, or even be charged weekly, and often begin without clear warning or proper documentation.

How the Scam Works

Step 1: Trader Becomes Inactive

The trader might stop trading due to:

• Market volatility
• Personal reasons
• Loss of interest
• Waiting for better opportunities

Funds remain in the account, untouched.

Step 2: Broker Initiates Inactivity Charges

After a short period—sometimes just 30 days—the broker begins deducting fees labelled:

• “Dormancy fee”
• “Account maintenance charge”
• “Monthly inactivity penalty”

These deductions are often hidden in statements or not communicated directly to the client.

Step 3: Balance Is Gradually Drained

Each week or month, the account is hit with further charges. Because no trading is taking place, there is no chance to offset the losses. Eventually, the balance reaches zero or near-zero.

If the trader logs back in, they may find:

• A deactivated account
• No funds remaining
• Additional fees to “reactivate” or recover statements

Step 4: Broker Blames the Fine Print

When challenged, the broker cites terms and conditions that:

• Were never clearly presented
• Are buried in unreadable legal documents
• Allow them “full discretion” to set fee levels

By the time a complaint is made, the trader has little evidence or recourse.

Red Flags to Watch For

Fees Start After a Very Short Inactivity Period

Most regulated brokers wait 6–12 months before charging inactivity fees. If charges begin after 30 or 60 days, it’s a red flag.

No Email or Platform Notification

If you were never warned that fees would begin, or no reminders were sent, the broker is intentionally hiding the deduction.

Fee Amounts Are Excessive or Arbitrary

Charges of more than $10–$15 per month are usually unjustified. Weekly or compounding fees are a sign of exploitation.

No Way to Pause or Deactivate the Account Temporarily

Legitimate brokers allow clients to close or freeze accounts to avoid fees. If your broker refuses this, they’re hoping to charge you.

Balance Disappears Without Trade Activity

If your account loses money while no trades are made, you may be facing hidden inactivity charges.

How to Protect Yourself

Use Regulated Brokers with Clear Inactivity Policies

Stick to brokers regulated by the FCA, ASIC, or CySEC. They are required to disclose all dormant account policies upfront.

Read the Terms Before Funding

Search for keywords like “inactivity,” “dormant,” or “maintenance” in the broker’s T&Cs before opening or funding an account.

Log In Regularly or Trade Occasionally

Even placing a single trade or logging in monthly can sometimes reset the inactivity clock and prevent fees.

Withdraw If You Plan to Take a Break

If you expect to step away from trading for a while, withdraw your funds to avoid being charged while inactive.

Challenge Unfair Charges Immediately

Save statements, email support, and request reversal of fees. If denied, escalate to the broker’s regulator or relevant financial authority.

Conclusion

Excessive Dormant Account Fines are a sneaky way for shady brokers to silently drain client funds, especially when traders are inactive or distracted. By charging unjustified fees and hiding them in legal fine print, these brokers profit from inaction—rather than performance.

To stay in control of your funds, understand broker policies, and prevent hidden erosion of your capital, enrol in our Trading Courses designed to equip traders with legal awareness, platform knowledge, and smart fund management across all stages of their trading journey.