Binary options companies have now begun to face the music with regard to duping consumers into depositing into a zero-sum game environment, and evading any consequences. The lack of business ethic extends to within the firms, as we investigate the widespread practice of employees stealing leads and selling them between companies – and how in some cases it is encouraged by prospective employers
It has become a well understood thorn in the side of the wider, good quality global electronic trading business that the ‘fringe’ contingent of binary options brands and the respective platforms that provide the brands with market making and execution facilities has at last begun to fall on its sword.
The binary options industry rose to prominence very very quickly in the middle of the last decade, largely due to the major platform providers having been established in Israel, however there is a vast difference between the binary options companies that operate from within Israel and provide their platforms and market making environment to brands, and those which operate in regulated jurisdictions such as Cyprus, Australia, UK and North America, and this can be narrowed down to the career paths of those which head the companies in Israel which are also a complete contrast to those overseas.
Far from the private school education, internships, and years of experience with large, global blue chip companies, many of Israel’s FX and binary options companies do not have shareholders or public reporting obligations, and are indeed owned by one or two people, who often do not disclose their identity.
The understanding of operations and business model employed by many binary brands – and in many cases warehouse FX brokerages in Israel – is also representative of a complete dichotomy from those abroad, largely because the retail FX and binary options industry in Israel did not rise up from the interbank or technology sectors that it did overseas, and was not established by financial markets professionals with strings of qualifications and shareholders to report to.
Instead, it was a spin-off from the huge gaming, affiliate marketing and sports betting businesses that are set up in Israel that market their services to retail gaming customers overseas (gambling is illegal in Israel).
The retail FX and binary options firms in Israel are often placed in the same category as gaming, sports betting or rebate marketing because they are often operated on the very same principle, by people who own a brand privately and had generated enough capital to buy a closed-system MetaTrader 4 license and recruit sales people in various languages (usually French or Arabic) to sell, under pseudonyms and pseudo-locations, retail FX to customers from a lead list that had been recycled from gaming firms, resulting in an outright ban of all OTC derivatives in Belgium, a nation with a large French-speaking population, and a ban on marketing in France as well as a collaborative effort between Israeli and French police to feel the collar of the villains involved in ripping off their citizens. So once again, the good guy suffers because of the bad guy. Bona fide firms cannot operate OTC derivatives businesses in Belgium and cannot advertise in France, because of the stain left by the binary options and warehouse firms of the same ilk.
Stealing leads from other firms
For many years, industry players viewed the FX and Binary Options “businesses” as commercial revenue generating enterprises thus are the next best thing to the now saturated gambling industry. As a result, the market quickly became populated with those who understand almost absolutely nothing about financial services but enjoyed the view that it is a financial services product, therefore added a lot more legitimacy vs. traditional online gambling.
Affiliate marketing, lead buying and recycling customers from gambling to binary under the same roof is very common. Now, with the nefarious nature of the low-rent binary options industry having had its very dirty laundry aired publicly, in mainstream news sources and now at the hands of the Israeli government, where the Chairman of the Israel Securities Authority Shmuel Hauser has been veciforously outspoken with regard to his disdain for the entire business whose fraudulent actions he considers to be a danger to the entire economy of the nation, vowing that he would expedite laws to make international sanctions possible to close the loophole that firms have long been using in Israel, that being to register their businesses offshore, and target customers in various locations outside of the region in which the company is based, often using fake names and fake location details.
The interesting thing is that to fully understand how rotten to the absolute core the binary options business really is, a brief look behind the scenes will reveal that not only do firms willfully steal money from people who think (quite wrongly) that they are investing in a financial product, but they all steal from each other too.
FinanceFeeds has conducted an investigation which delved into the depths of the marketing protocols of many binary options firms, deducing that far from legitimately purchasing leads, or investigating where a client may be relevant for a specific product (if there can be such a thing with OTC binary options!) the practice of stealing leads from other brands and recycling them is rife.
It is widely recognized that many binary options brands have also interests in poker and gaming sites, and then when the gambler has lost enough money, the brands transfer the lead to their binary options desk and try to convince the gambler that he should not gamble, but instead trade the financial markets, which is a blatant and outright attempt to mislead. The likelihood of the client being offered a live trading market is as likely as the binary options salesman’s real name is John Smith from London.
In fact, geographical knowledge appears to be something of a challenge for many of these representatives, which is interesting considering that they profess to be in an international business. One particular binary options brand was recently encouraging its sales team – all of whom had fake names – to explain that they were calling from Dublin, Ireland, UK. Unless I have missed some very important geopolitical news, Ireland has never been in the United Kingdom. We must have all been wrong about the difficulties associated with the reign of William of Orange dating back to 1672.
Lying to customers about the actual product, disguising a gaming platform which is weighted in favor of the house as a financial markets system, about the names and location of the firm and other important matters is one thing, but stealing leads from each other demonstrates the lack of moral standards which run deep.
Recently, many lead buying advertisements have proliferated LinkedIn, which is intended to be a business networking site, not a place to peddle recycled customer data for which the vendor has no intellectual property rights.
My experience of explaining the rules of intellectual property to many binary brand owners has resembled attempting to explain to a hedgehog how a hot film mass airflow sensor works. The answer, and I quote verbatim, from one particular large binary options brand that also has a lead buying and gaming business was “We target people who are addicted to gambling. We look to get leads from all sources and funnels, and if people working here can bring leads then this is better.”
What this particular binary options brand owner was alluding to was that they like to employ people who have worked at another binary firm, who before leaving, have copied the database onto a memory stick in order to bring it to another firm.
If the internal procedures do not respect the intellectual property of other businesses, legitimate or not, then there is little hope for any morality toward product or customers.
Another nasty trap is the plethora of entities now selling leads on the internet, with very garish marketing campaigns aimed at attracting the attention of hungry binary options brand owners.
Affiliate marketers – likely ex-binary options sales staff – selling stolen leads
Today, FinanceFeeds approached three of these entities, however we believe that they are all connected and that it is a band of former binary options salespeople who have stolen leads and are now offering them on the open market. “Ping Me For Leads” stated the front page slogan on the messenger used by one particular entity. Hmm, how inviting. I might just do that….
Our conversation began with one particular sales person stating “Let me explain how we qualify leads. We have a call center in house, where we qualify leads, and for each lead you get fully verified details, (no wrong numbers, duplicates etc.), they will be all in a position to invest, they expect to get a call and to be made an offer to trade from your sales team, and all leads are qualified in an individual campaign for each client and are branded (we introduce your brand, promotions etc.)”
(Editor’s note. I had to straighten the English out here. Normally, the addition of the abbreviation sic. would be enough, but to comprehend what was an incoherent written sales pitch, I needed to adjust the English significantly. John Smith, my foot.)
The salesman was then asked by FinanceFeeds how the leads are acquired. “We get them from our funnels – financially related seminars, webinars, e-books etc”. I would love to know what the “etc” is. Sounds fascinating. Perhaps it is an acronym for ‘entirely, totally corrupt’.
When asked how lead sales people safeguard the leads that they are selling to ensure that they are not stolen, the salesperson backtracked, admitting “We target all of the regions that are popular, however these leads are not fresh and this is the main issue.”
We asked if they had been used by other binary options brands, to which the answer was “Yes exactly.” Make of that what you will.
The price we were offered was 22 euros per lead, and were asked how many we would like to start with.
The company maintained that “Every lead that you receive will speak to our call operators, who will introduce your brand, promotions, offer etc (more etc, interesting) and we will explain the next step which is a sales call from your sales team. Only if they agree this is counted as a lead and we set up a time-slot for the phone call.”
This practice has become so widespread that the platform providers are aware of it. One particular executive within a platform firm once explained that automation is perhaps a means of removing the high pressure sales from the binary options business, a question that FinanceFeeds posed to CySec Chairman Demetra Kalogerou in the summer of this year, her having concurred with this line of thinking.
However, this particular platform developer explained that it is not only the high pressure sales that could be rooted out by automating platforms and removing staff from offices, but the theft of leads by employees in binary options brand call centers and resale of such leads to other brands using the same platforms and selling the same ‘product’.
#binary options, #Lead, #Lead Lists, #Lead Selling