Do any binary options complaints reach UK alternative dispute resolution bodies?
“I have read a number of stories about binary options fraud, but as yet I haven’t seen any cases relating to it reach IBAS”, says Richard Hayler, Managing Director of the Independent Betting Adjudication Service (IBAS).
FinanceFeeds has been keeping its readers informed about the measures taken to tackle binary options fraud and the trends concerning regulation of this rather controversial segment of online trading. In the UK, the Police have been warning of the dangers associated with binary options trading, whereas the UK Financial Conduct Authority (FCA) has registered a rise in enquiries about binary options firms.
And yet, it is the Gambling Commission that is responsible for the oversight of binary options operators, which are required to have gambling licenses to operate legitimately in the UK.
Recently, a BBC Radio 4 program talked about how disputes between gambling services providers and their customers are handled in the UK. According to Sarah Gardner, Executive Director of the Gambling Commission, in case of a dispute, the gambling operator should first try to resolve the complaint using its own complaint procedure. If not – the client should take his/her complaint to an alternative dispute resolution (ADR) provider.
The role of such ADR bodies is crucial and this has prompted the FinanceFeeds’ team to explore the matter with regards to binary options. Do gambling ADR bodies deal with binary options complaints? Is there a rise in such disputes? Are there any such disputes at all?
FinanceFeeds contacted the Independent Betting Adjudication Service (IBAS), a major ADR body for the gambling sector, set up in 1998. Richard Hayler, Managing Director at IBAS, has kindly agreed to help us clarify where binary options disputes stand in the overall ADR picture.
We were curious as to whether IBAS has dealt with any binary options complaints thus far.
“I have read a number of stories about binary options fraud, but as yet I haven’t seen any cases relating to it reach IBAS”, Richard Hayler, Managing Director, IBAS.
He noted that IBAS would only register companies that offer binary trading if they are licensed by the British Gambling Commission. Mr Hayler then suggested several possible explanations for the peculiarity in dispute resolution when it comes to binary options and binary options fraud.
“So perhaps the problem is either:
- restricted to the unlicensed or weaker-regulated sectors;
- being reported to other agencies instead (e.g., the Police, Trading Standards or the Financial Ombudsman), or
- it is not as great as has been made out.”
In conclusion, Mr Hayler promised to let us know in case IBAS sees any growth in the number of disputes about binary options.
IBAS, which is one of the 11 ADR bodies approved by the Gambling Commission, will only adjudicate on disputes when:
- the operator holds an operating licence from the Gambling Commission and the dispute concerns a wager which is subject to the laws of England and Wales, or Scotland;
- the operator is registered, or becomes registered with IBAS, prior to the adjudication of the dispute; and
- the Dispute is not the subject of any court action, unless referred to IBAS by the Court.