Binary options trading has taken over the online investment world in recent years. Still, it has now evolved into something that has scared many people due to the large number of fake investment sites that have led many people astray and caused them to lose millions of dollars through this fraudulent investment strategy.
What is a Binary Option?
A binary option is a financial product that reduces every trade to a simple yes or no decision. Unlike other stock markets, instead of buying a stock, binary options just require you to determine whether a call will be above a given price at a specific period. Then, you accept if you believe it will be, and if you don’t think it will be, you should sell.
Where does the fraud come in?
Many of the binary options scam websites’ culprits are only interested in one thing that is taking your money. These people go to considerable lengths to attract investors. They promote their platforms with enormous promises of easy money, low risk, and excellent customer service—often on social networking sites, numerous trading websites, message boards, spam e-mails, etc.
And their target audience is either people who have already lost their money and are lured by some quick money-making schemes; or people who are new to this trading and stocks field. They tempt such people by demonstrating returns in their early trading moments, and the naïve people fall prey to such schemes and start investing more and more until they have amassed a large sum of money. And during the time of withdrawal, the scammers’ ghost the customers, do not respond to any emails or complaints issued, etc. And hence the person realizes that he has been scammed.
After being scammed, many people do not report it as they fear and are an embarrassment. But it’s better to issue a complaint regarding such a situation as it helps the cops get an idea as to how many people have got scammed and try and stop the scammer’s activities. Also, know that there are many binary options scam recovery firms out there that will help you get your money back. By performing early assessments, these companies aid in the recovery of funds. The next steps are to gather evidence and address corrupt practitioners. These businesses put forth a lot of effort to help victims recover money from scammers.
These complaints generally fall into one of the three following categories:
- Customer accounts are not credited: Clients’ withdrawal requests are generally canceled, customer phone calls and e-mails are ignored, accounts are occasionally frozen, and customers are accused of fraud.
- Theft of one’s identity: Binary options website representatives may say erroneously that the government demands photocopies of your credit card, passport, driver’s license, utility bills, or other personal information. This data could be used to steal your identity in the future.
- Trading software manipulation: Some of these online trading platforms may alter their algorithms to make losing trades on purpose, frequently distorting prices and payments. For example, if a customer has a winning trade, the expiration period is extended until the deal is lost.
Things to consider before investing in Binary Options Trading
There are a few points to bear in mind to be protected from fraud for those who are still ready to take a chance on Binary Options after learning about the hazards. To begin with, never invest more money than you can afford to lose. To put it another way, don’t put your house, car, or other valuables on the line to trade in binary options. For starters, use a small amount to test the water.
Second, educate yourself with a thorough knowledge of trading. Before making any deal, do your homework and learn everything there is to know about the marketplace and the product you’re going to trade into. Also, learn about the typical fees, commissions, taxes, and other hazards associated with that specific deal. This understanding will aid you in recognizing a scam when you come across one.
How to not be a victim of Binary Options Scams
- Check to see if the binary options trading platform you’re considering has registered its offer and sale of products with the Commodity Futures Trading Commission (CFTC).
- While having a registration doesn’t guarantee that the entity has passed background checks and complies with trading regulations, it does imply that it has.
Finally, don’t put money into something you don’t fully comprehend. If you can’t even explain the investment scheme in a few words in a way that anyone can understand, you might want to reevaluate your decision.