The mandatory re-verification post-deposit scam occurs when a broker requires traders to undergo additional identity verification or submit new documentation after making a deposit, even though the trader has already completed the verification process previously. This tactic is often used by unscrupulous brokers to delay or block withdrawals, especially when the trader has made a significant deposit or accumulated profits. The broker claims that the re-verification is necessary for security reasons or compliance with regulations, but it is typically a delaying tactic designed to prevent the trader from accessing their funds or disrupt their ability to withdraw profits.

This isn’t a regulatory requirement—it’s a deliberate attempt to prevent you from withdrawing funds.

How the Scam Works

1. Trader Makes a Deposit
A trader decides to deposit funds into their account, trusting that the broker’s platform will function smoothly. The deposit is typically made via:

• Bank transfer
• Credit card
• E-wallets (e.g., PayPal, Skrill)

The deposit is made, and the trader expects to continue trading or withdraw funds when needed.

2. Broker Requests Additional Verification
After the deposit is made, the trader is informed by the broker that:

“We need you to complete additional identity verification due to a system update.”
“To process your recent deposit, we require re-verification for security purposes.”
“Please provide new documents for compliance reasons before we can proceed with your withdrawal.”

This request comes unexpectedly, even though the trader has already provided all required documentation during the initial account setup.

3. Broker Claims Re-verification Is for Compliance or Security
The broker justifies the re-verification process by citing reasons like:

“Our system detected an issue with your verification documents.”
“We are conducting routine checks on accounts with recent deposits.”
“Due to regulatory changes, we need to re-confirm your identity.”

In reality, the broker’s aim is not to comply with any legitimate security or regulatory measures, but rather to delay the trader’s withdrawal or block access to funds.

4. Trader Faces Further Delays or Denial of Withdrawal
Once the trader submits the required documents, the broker may:

• Delay processing the withdrawal, claiming that the new verification is still under review
• Continue requesting more documents or additional verification, leading to unnecessary back-and-forth
• Eventually block the withdrawal entirely, using the re-verification process as a reason

The trader finds themselves unable to access their funds or complete their withdrawal requests, with the broker continuing to demand more verification or providing vague explanations for the delay.

5. Broker Takes Advantage of the Situation
During the re-verification process, the broker may:

• Increase fees or introduce new charges that were not present before
• Limit trading activity or impose restrictions on the trader’s account
• Prevent any form of access to the trader’s funds until the issue is resolved, which may never happen

By keeping the trader in a constant state of re-verification, the broker benefits by locking up funds and hindering withdrawals.

Real Case: Trader Blocked from Withdrawal After Re-verification Request

A trader makes a significant deposit of $10,000 into their trading account. After the deposit is made, they receive a message from the broker:

“In order to complete your deposit and allow withdrawals, we need to re-verify your identity. Please submit a new utility bill and a recent bank statement.”

The trader submits the requested documents, but after several days, they are asked for further documentation, and their withdrawal request is still pending. After multiple attempts to contact support, the trader is told that the withdrawal is on hold due to the ongoing verification process, and no timeframe is provided for resolution. Eventually, the trader loses access to their funds, with the broker providing no clear resolution.

Why This Scam Is So Dangerous

The mandatory re-verification post-deposit scam is particularly harmful because:

• It delays or blocks access to funds, especially if the trader is looking to withdraw profits after a successful trading period
• It creates unnecessary barriers for traders who have already completed all required identity checks
• It forces traders to submit additional documents, often for no legitimate reason, to justify withholding funds
• It exploits the trader’s desperation to access their money, causing frustration and confusion
• It benefits the broker by keeping funds locked in the account longer and delaying withdrawal payouts for as long as possible

This tactic undermines trust and can result in the loss of capital, especially if the trader is unable to access or withdraw profits.

How to Detect the Scam

1. Unclear Terms Regarding Re-verification
Before making a deposit, review the broker’s terms and conditions carefully to see if they mention any clauses regarding re-verification after deposits. Legitimate brokers will:

• Specify any circumstances where re-verification may be required
• Clearly state how withdrawals are processed after a deposit

If these terms are unclear or vague, it could be a sign of an untrustworthy broker.

2. Re-verification Requested Only After Large Deposits or Profits
If the broker requests re-verification only after a large deposit or when you attempt to withdraw profits, it’s likely a manipulative tactic to delay your access to funds. Brokers should not arbitrarily request additional verification once you’ve already completed the KYC process unless there are legitimate security reasons.

3. Frequent Requests for Documentation
If the broker asks for the same documents multiple times or keeps requesting new documents for re-verification, it’s a sign of manipulation. A legitimate broker will only need to verify identity once and will not repeatedly ask for additional documents unless there are exceptional circumstances.

4. Vague or Evasive Responses from Customer Support
If the broker’s support team:

• Provides unclear explanations for the delay or re-verification
• Ignores requests for updates on the verification status
• Tells you to keep resubmitting documents without offering any clear timeline

…it’s likely the broker is delaying the withdrawal process intentionally.

How to Protect Yourself

1. Research the Broker’s Reputation and Regulation
Always ensure the broker is regulated by a respected authority such as the FCA, ASIC, or CySEC. Regulated brokers are more likely to adhere to clear withdrawal procedures and only request verification when legally required.

2. Review Terms and Conditions Before Depositing

• Make sure the broker’s terms and conditions clearly outline withdrawal policies and the need for verification
• Check if there are specific clauses about re-verification, especially after a deposit or profit spike

3. Avoid Brokers with Unclear Verification Policies
If the broker’s verification policy seems unclear or overly restrictive, or if there are frequent complaints about withdrawal delays or re-verification, consider finding an alternative broker that offers more transparent procedures.

4. Withdraw Funds Regularly
To avoid having funds locked in your account, withdraw your profits regularly. This reduces the chance of the broker delaying withdrawals once you’ve made a profit or after a large deposit.

5. Keep Detailed Records of All Correspondence and Documents
Document every interaction with the broker’s customer support, including screenshots of requests for documents and responses from support. If the broker later denies your withdrawal, having detailed records can help escalate the issue to regulators.

Regulatory Expectations

Under MiFID II, FCA, ASIC, and CySEC regulations:

• Brokers must disclose their verification requirements upfront and provide clear instructions for any re-verification process
• Brokers are required to process withdrawals promptly once all necessary documentation is received and the account has been verified
• Requests for additional verification should be based on legitimate security or regulatory reasons—not used as a tool to delay or block withdrawals

Brokers who engage in these manipulative practices risk facing regulatory sanctions and fines for failing to adhere to best practices.

Conclusion: If They Delay Your Withdrawal After a Deposit, It’s a Red Flag

The mandatory re-verification post-deposit scam is a delaying tactic that brokers use to withhold profits or prevent withdrawals. If a broker demands repeated verification after a deposit, or refuses to process withdrawals, it’s likely part of an effort to retain your funds.

To protect yourself, always research the broker thoroughly, understand their terms, and withdraw profits regularly. If you encounter issues with delayed withdrawals, escalate the issue to a regulatory body for resolution.

To learn more about ensuring safe trading and protecting your funds, enrol in our Trading Courses. We’ll help you avoid common broker scams and make informed trading decisions.