FCA: over £87,000 lost to binary options scams every day in the UK

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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. For example, you could bet at 2. You are not buying or selling the gold, just predicting whether the price of it will rise or fall.

Time periods involved tend to be very short 5 or 10 minutes but some firms offer longer periods to bet over. Action Fraud has received reports June - May about binary options in the last year, with an average of 27 reports avoiding binary options complaints uk per month. Those who have mostly reported are men who have being paying via debit or credit card.

Reports avoiding binary options complaints uk binary options fraud which are made to Action Fraud are assessed by the NFIB and sent to law enforcement for investigation. The City of London Police earlier this year arrested a year-old man from Essex who was alleged to have been avoiding binary options complaints uk controlling force behind Base2Trade, which is now in liquidation. The company sold fraudulent binary options trading from three offices in the City of London; located on Bishopsgate and New Broad Street and in Tower He has been released on bail until August.

If this is not the case, any binary options that the firm offers will not be regulated either by the Gambling Commission or by the FCA. However, other European Union EU countries consider binary options to be a financial, rather than a gambling product. This means that although the FCA does not currently regulate binary options, firms offering binary options trading which operate as financial services firms in other EEA countries, avoiding binary options complaints uk able to do business in the UK and consequently appear on our Register of financial services firms.

Platforms are set up all the time to appear legitimate, but are actually fake. Victims who reported to Action Fraud wanted to share their experiences, one said: I declined this offer. Despite numerous phone calls to the office for someone to call with my account details, no one has returned my calls. A second victim said: The account grew and showed good returns.

All the transactions were avoiding binary options complaints uk by debit from two of my credit cards. I was given avoiding binary options complaints uk bank details to enable me to do a wire transfer, but did not use that function. You are here Home. When do Binary Options become fraudulent? Fraud occurs when Binary Trading Platforms: Offer a higher than average return on an investment.

Refuse to credit customer accounts. Break all contact with the customer. Manipulate software to distort prices and payouts. Victims of Binary Options Fraud share their experience: 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. 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. Avoiding binary options complaints uk you think you have been a victim of fraud you should report it to Action Fraud by calling 20 40 or by using the online reporting tool.

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This is a question many traders would love to know the answer to. We decided to put all our experience with brokers and robots into one article to help traders avoid being scammed.

It is important to detect potential fraud before you make a deposit; otherwise, it could be too late. Binary scams are the sickness of the industry.

Binary options, as a trading instrument, have a bad reputation mainly because of the scam schemes. Too many traders have been ripped off during the years, and they spread negative comments all over the internet.

There are many reputable and reliable brokers that are regulated and treat their customers fairly. However, because of scams, the whole industry suffers, and some measures should be taken.

We decided to help traders and reveal some of the most common dishonest schemes. Hopefully, you will learn to avoid them. You know you are dealing with a bad brokerage when you have withdrawal problems or price manipulation in your trading. He or she will often offer you more bonus money, signals, free trades, or a higher tier account an upgrade from your current account to a Gold or Platinum, depending on the account structure.

If this happens, stay firm in your decision to withdraw and let them know you want your money, not some cheap offer. Usually, if you accept a bonus, you have to reach a certain trading volume before being able to withdraw even your own money. If this limitation only applied to the bonus amount, we would be okay with it, but some brokerages extend the limitation to your own money. Brokers can manipulate the price they give you for a certain asset.

If you are dealing with a scam brokerage, you can expect this to happen when you become profitable. When the broker sees you are making many profitable trades, it can change your strike price or closing price. This is a big risk because a profitable trade will turn into a losing one. When you see sudden price reversals or volatility spikes, open a chart provider and check whether that movement also appears there.

Netdania is a good source for free charts, but you can also find other options online. Account managers can promise you profitable trades if you give them access to your account. This is a major issue, but unfortunately, it happens a lot with scam binary options brokers. It is also possible a manager will trade without your consent. That means he or she has access to your account, and no one but you should have access! The binary options robots are also very popular scams.

This auto-trading software is heavily advertised as the best money machines. You just need to make a small deposit, and the robot will double it or even triple it in a few days. This, supposedly outside, software that provides auto-trading is usually connected to a scam broker. In theory, you deposit money at the broker, then you connect your trading account to the robot, and the cash flows run into your bank account.

Of course, this is a deceptive illusion, and this robot will only blow your account. Then, you will contact customer support, and they will suggest you make a bigger deposit to experience the full potential of the robot. To better understand how fraudulent this software is, you can think about the following. If this robot is so profitable and all traders make money, why is it free? How do these guys monetize? Where there is a lot of honey, there are also some flies buzzing around.

In our case, the flies are so-called binary gurus. They present themselves as seasoned pro traders, former university mathematicians who have created the ultimate These guys create fake accounts on Facebook and YouTube to spam testimonial messages. They promise you big profits in the short term and usually are trying to sell you a trading system or an auto-trading robot. What they are actually doing is creating a setup of some free MT4 indicators and trying to sell it for money.

If you search Google, you can easily find these indicators and download them for free. Avoiding a scam robot is easy: So, you ask, how do I avoid a scam binary broker? Most scam brokers operate unregulated with registrations in offshore zones.

Before you register at a broker, contact customer support via live chat. You can ask them all kinds of questions concerning withdrawals, price quotes and promotions. If your questions are avoided and the representative pushes you to register and deposit, chances are you are dealing with a bad broker. The support staff should offer information, not try to sell you an account. If they offer you an account manager who is willing to trade with your funds, think twice.

When you make profit, the company loses money; the binary broker simply works as a casino. Unfortunately, there are many naive people who believe someone will make them free money. The brokers know that, and with a number of phone calls, they can even make you deposit more after you lose your first deposit. At a fully regulated broker, it is absolutely forbidden for a third party to trade with your funds.

If you submit your account details to someone else, and this someone loses your funds, the regulator can do nothing about it. To avoid troubles, you should simply register with a regulated company that offers binary options. This way, your money will be safe and you will be able to request a withdrawal at any time.

We know there are good brokers for sure, but you still need to be a good trader to make profits. If you are looking to make some quick bucks and skip studying the markets, you will most probably end up with empty pockets anyway.

The binary options industry is not the safest out there because of all the scams that hunt your money. If you keep on your toes and stay vigilant, you can learn to avoid them. Skip to main content. How to avoid binary options scams You are here Home. We strongly advise you to trade only at regulated brokers. Scam binary brokers You know you are dealing with a bad brokerage when you have withdrawal problems or price manipulation in your trading. What are the risks if you trade at a scam broker?

Bonus frauds Usually, if you accept a bonus, you have to reach a certain trading volume before being able to withdraw even your own money.

Price manipulation Brokers can manipulate the price they give you for a certain asset. Fraud account managers Account managers can promise you profitable trades if you give them access to your account. Scam binary robots The binary options robots are also very popular scams. The binary gurus Where there is a lot of honey, there are also some flies buzzing around. Customer Support Before you register at a broker, contact customer support via live chat. You should deal only with regulated companies To avoid troubles, you should simply register with a regulated company that offers binary options.