GUILTY Case# 2011-073 | m1refaat vs www.afb.com.kw

[Pharaoh]

Their FAQ clearly says that the don't increase spreads, but they did increase them. Looks like an automatic Guilty to me.

 

[Ingot54]

Still waiting for the evidence (a copy for an email sent twice to clients to notify them about the possibility of increasing spreads according to the market situation).

I am not ready to vote yet because I do NOT believe we have seen all of the evidence, and this is very important.

I think it is too early to just vote and wrap this up.

It is possible for a company to focus on a grey area and receive the benefit of the doubt, as a couple of posters seem to be leaning towards. At the same time, AFB is really deflecting attention from what needs to be the true focus of this inquiry - that of deliberate deception, and thus a scam practice designed to extract account money from clients who are vulnerable.

Yes, M1refaat does seem to have ignored sound money management, but HE is not on trial here for unsound money management. In fact, while that was foolish for sure, it does not excuse Arab Financial Brokers from altering spread without adequate notice.

If, as DrmOOdy says, they had altered spread twice previously, why didn't they place this information CLEARLY on their website? Why had they NOT altered their website to reflect a change of policy - that they DO in fact alter spread? What would have happened to any new client who signed up immediately before the spread was floated "according to their corresponding markets and liquidity providers"?

You see, AFB have NOT shown that they didn't deliberately mislead or deceive.

I am also waiting to see the date and contents of two emails the company say they sent to clients warning of the spread widening on a specific pair, on a specific date for a specific time. I believe that what DrmOOdy is doing is playing on sentiment here, and really needs to get serious about facts and more facts here.

In effect, DrmOOdy is setting a smoke screen to conceal the true issue - that of widening the spread at an opportune moment, to take the money from the client.

THAT is what happened, and THAT was the result of the action of AFB.

DrmOOdy is still NOT addressing the issue: Did AFB notify clients of the change of spread policy? Can we please see a copy of the email sent to all clients, as stated? This will place the issue beyond doubt.

Again, I am asserting that AFB have changed the goal posts after the ball has been kicked. You can NOT trust a broker who says one thing and does another.

Period.

To my way of thinking, anything that is designed to give a broker an unfair advantage over a client, without the knowledge of the client, is a scam.

If AFB are seriously expecting to be let off the charges here, then they should give a undertaking to permanently remove ALL reference to fixed spreads, and offer some form of compensation to M1refaat for what has occurred.

This is a difficult case for me, and I am loathe to vote "not guilty" simply because of the poor money management skills of M1refaat.

On the other hand, I am not yet willing to vote "guilty" because I have yet to hear a better defense from Arab Financial Brokers. This is critical to the case.

While these words remain on their website, I am leaning towards "Guilty":

Do you increase your spreads in volatile market?
No! AFB doesn't increase its spreads in volatile market. We offer our clients fixed spread policy

There is no ambiguity about that statement.
It is very specific - they promise NOT to change spreads.

And then they did.

Having those words on their FAQ section, implies that they are willing to absorb both the plus and the minus side of spread volatility, and this deceives a client into thinking that spread is indeed solid.

If I can not see this email within 24 hours, I will be voting "Guilty". You can not be "half-guilty" and AFB is certainly already looking dodgy for having the misleading statements about "fixed spread" STILL on their FAQ list.

I take this issue very seriously, because not only is the outcome likely to affect the client, it can affect the broker as well. We need ALL the facts please.

 

[drm00dy]

AFB

I just want to add one thing, despite that AFB notified their clients about this increase on spreads they just increased it only for three hours until the market closed on last Friday before the New Year 2010.
I cant see that its a scam or anything related to and im not sure that anyone of you respected people contacted the company to make sure if Mr. m1refaat was telling a real facts or he just complaining his lost and want that AFB take the responsibility of it.
its too late to convince you that AFB not guilty because most of you already voted that they are guilty.

 

[cybergianni]

they are brokers not brothers!

hello m1refaat,
yours is a terrible situation, a lot of brokers and banks and insurances play this kind of games with us. when has come the moment to sign a contract (or push the "yes" botton) they are all smiles and "don't worry sir", then at the first chance they have to defraud you they do because they wrote it on the contract that most of people never reads.
so I realized that the 50% off on the adsl line was actually 15% due to some activation fees (clearly written on page 4 of the damn-small-font-contract)
or the car insurance that will change all your broken glasses for free and then you pay because on page x...
I could write a book on this topic but do not want to make you bored.
Advertisements are not contracts in this world and this is the problem.
Until the day we do not make a class action and have a law stating that an advertisement has the same or more legal value than the official contract (read the small letters on advertisement..) we will be exposed to all the scam of this world.
I will votenot guilty for this case. legally speaking they are right and they did not made any illegal action but I find really disgusting to use religion and moral values to attract customer and then act as the rest of the world of what they call sinners.
the last thing... how did you think to get out from hedging without margin?
the moment you switch the position you find yourself with a short or long position pending and you need margin for that...
anyway.. I wish you a succesful trading
all the best
Cybergianni

 

[Ingot54]

hello m1refaat,
yours is a terrible situation, a lot of brokers and banks and insurances play this kind of games with us. when has come the moment to sign a contract (or push the "yes" botton) they are all smiles and "don't worry sir", then at the first chance they have to defraud you they do because they wrote it on the contract that most of people never reads.

Advertisements are not contracts in this world and this is the problem.
Until the day we do not make a class action and have a law stating that an advertisement has the same or more legal value than the official contract (read the small letters on advertisement..) we will be exposed to all the scam of this world.

I will vote not guilty for this case. legally speaking they are right and they did not made any illegal action but I find really disgusting to use religion and moral values to attract customer and then act as the rest of the world of what they call sinners.

all the best
Cybergianni

Cybergianni, we need to decide if AFB were guilty of scamming, and it looks like their website is still
promoting "Fixed margin" ... until the next time volatility gets too hot for them to absorb, and more traders will lose accounts.

If this is not a scam, then what is it?

What is a trader to believe?

Why does: "We do not change spreads"

mean: "We can change spreads any time we like"?

This is a very serous misleading statement - to say they don't have floating spreads, and then float them "for 3 hours."

It is clear that the website was designed to trick (scam) visitors to the site into believing that spreads could be relied upon.
And as you said, they got the business, then behaved like the infidels they love to point the finger at as sinners.

I do not think that the behaviour was legal, because there are things you say in advertisements that have to be adhered to.
A legal court would not hold them guiltless for that, and so this is clearly a scam.

The real test of this is: "Would you do business with AFB based on the knowledge you now have about their practices?"

If you would, then they are not guilty.

For myself, it is a big NO - I would not deal with them because their advertised policy is not worth the paper it is written on.

I have voted guilty on the scam alone.

They need to remove the "fixed spread policy" statement, because this is at the centre of the scam problem.

There is no way out of that - it is not true that spreads are fixed.