Have you ever heard of binary options? This is a kind of fixed-odds betting.
This trade would involve whether an event happens or not, with the outcome being yes or no. If ever the investor is correct, they will ‘win’, seeing a return on investment. However, if they ‘lose’, they end up losing the entire investment.
Since April 2019, the FCA banned firms from selling binary options in UK, and if one is offered this from the area, then it’s most likely a scam. But how do binary options scams work in the first place and why are companies like The Global Payback fighting against these kinds of scams?
Read on to find out!
How Binary Options Scams Work
Binary options are all about predicting movements of assets, index prices, and commodities over a short period. Though they are legit financial products that have licensed firms trading through these, binary options continue to be high-risk and speculative products that are impossible to predict, even for the experts.
This is an options contract where the payout will depend on outcomes from a yes or no proposition, relating to whether prices of certain assets will rise or fall based on a specific amount.
After acquiring the option, the holder doesn’t need to make any further decisions about the exercise of the option, as it would do to itself. Compared to other options, this won’t give holders the right to sell or buy the asset. If the binary option expires, the holder will receive a pre-determined amount of money or, unfortunately, nothing.
In fact, scammers would scam people by selling binary options as a way to steal your money. Such scammers will use pressure sales tactics, trying to convince you to invest in trading accounts. They will advertise this overall system as being very simple with guaranteed profit.
When you agree to this, you will then be directed to a website where you should sign up. You’ll be directed to a trading platform, where your money is placed into the trading account. After that, they will continue showing you a lot of successful trades and stories, encouraging you to invest more money into it.
After you have become invested and started putting more money in, your money would end up decreasing rather quickly. If you try withdrawing, it will end up being impossible, and even if you were to complain to the scammer, they will only tell you that they are doing what they can to fix the issue.
Unfortunately, this leads to scammers not taking any calls from the victim anymore, eventually with the firms and trading platforms disappearing.
Typical Complaints Related to Binary Options Scams
Not only has the UK experienced these types of scams, but the SEC has well. They have received a lot of complaints of fraud relating to websites that offer binary options through online trading platforms.
These are the most common complaints made:
- They will refuse to credit any customer accounts orreimburse the funds created.
- Identity theft, as scammers would steal the information inputted on the website
- Manipulating software to generate a loss of trades and money
This is why you need to avoid offers and opportunities of binary options. The lucrative scheme may be promising, but that is all there is to it. All promises with the smallest chance of it actually being real!
Protecting Yourself from Scams
With all that in mind, you will need to protect yourself from such scams. Here are a few tips to keep yourself safe:
- Be careful and don’t fall into the traps of advertisements on websites and social media, which promise a high return on investment from binary options
- Only transact with financial service firms known to be authorized by the local and national government agency of your country
- If ever you have doubts about certain financial firms, check out your country’s online registry to find the firm’s license and/or authorization to operate. They may also have a warning list of what companies you need to avoid.
- Even if a firm is considered legit, it may be a clone. Ask the firm for their reference number and contact details, checking to see if it matches what is on the government’s online registry.
- Do NOT use links from emails or websites from firms offering an investment
- Be wary of people who contact you via email or phone randomly, pressuring you to invest immediately or promising high returns. If it sounds too good to be true, it most likely is.
Wrapping It Up
Binary options are most likely a scam you need to stay away from at all costs. If ever you believe you have been scammed or about to be, then report it immediately.
Hopefully, you learned a lot about binary options and what you should do to protect yourself. Continue to educate yourself about such scams to keep your assets and finances safe.