Trading binary options may seem tempting depending on your situation, but come with an extremely high level of risk due to the fact that they are all-or-nothing propositions – when they expire, you either lose your entire investment or make a pre-determined sum of money. Fraudulent schemes, many of which originate outside of the country, only add to the risk level of these binary options.
The Financial Industry Regulatory Authority (FINRA) recently reported that their Securities Helpline for Seniors has received a number of calls that indicate a worrying number of binary option scams are making the rounds. According to callers, they have received offers from firms claiming to be binary options trading firms. However, these scammers require payment to receive an investment return, refuse to return any funds, and fail to deposit the funds investors pay in their accounts.
At least one caller reported a scammer claiming to be a representative from a regulatory organization accusing them of taking part in illegal binary options trading, and demanded that the recipient of the call pay them a fine. Other callers have reported instances where scammers claim to be able to return investor’s funds once they pay an advance fee. Both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have received calls reporting similar issues.
Investors considering binary options need to take care when receiving these types of calls from companies outside the United States in order to avoid becoming the victim of one of these scams. This includes demo accounts that allow investors to test trading binary options without risking personal assets and applications that imply a quick and simple path to wealth. Scammers pay attention to these types of accounts in order to determine who to target with offers of “real” trading accounts or by requesting personal information in order to commit identity theft.
If you have already opened an account, keep a close watch for any signs of fraud including:
Protect Yourself Before You Invest
Unfortunately, people can still fall prey to these types of scams no matter how prepared and cautious they are. If you lost money by investing in one of these scams, contact one of the investment fraud attorneys at Meyer Wilson today. We have helped thousands of victims of fraud recover their losses, and handle all cases on a contingency fee basis – you won’t owe us any legal fees until we help you recover your lost funds. Call us at one of our four locations today, or fill out our online form to start out with a free case consultation.