Posted on 6th April 2017
We are raising awareness as fraudsters use Binary Options for investment scams.
The National Fraud Intelligence Bureau (NFIB) has received reports of Binary Options scams circulating. Although we have not received reports of the scam in Derbyshire, we wanted to raise awareness to prevent residents from falling victim.
Binary Options are called ‘Binary’ because there can be only two outcomes – win or lose. To trade, all you need to do is bet on whether the price of something will rise or fall below a certain amount - if it is correct, you win and get paid. If not, you lose all of the money you originally invested.
You can choose various commodities to trade in such as gold, oil or stocks etc. The value of a Binary Option is made up from the value of the asset you want to trade.
The NFIB has received multiple reports whereby Binary Options companies have refused to credit customer accounts despite the customer believing they had made a profit.
It is believed that the software controlling the trading platforms is being manipulated by the companies to distort prices and pay outs, showing customer accounts to be in profit whilst they are paying in; but then ‘losing’ all the accumulated funds in a series of trades when the customer tries to withdraw their money.
It is unlikely that any money was ever traded on behalf of the customer and their ‘profits’ never actually existed. The brokers were simply trying to get the victims to invest further money.
Protect yourself against Binary Options scams:
- If you’re considering any type of investment, always remember: if it seems too good to be true, then it probably is.
- If you get a call out of the blue from someone offering investment opportunities, be wary; if in doubt don’t be polite, just hang up.
- If in doubt, where you think a firm offering binary options may not be trustworthy or legitimate, do not transfer money to them or provide them with your bank details.
- Be mindful of any bonus structures and clauses preventing you from withdrawing funds.
- Make sure you have read and considered conditions set out by the company making it mandatory to “turn over” your original deposit over a multiple amount of times before you can withdraw your money.
- The Gambling Commission advises that UK consumers should research the market carefully before participating in such activities.
- Check whether a company holds an operating licence from the Gambling Commission by searching the public register of licensees.
If you have been affected by this, or any other fraud, report it to Action Fraud by calling 0300 123 2040, or visiting www.actionfraud.police.uk
For more advice around fraud, visit the dedicated Stamp out Fraud webpage here