Binary options raise further concerns across the UK
The Derbyshire police say the software controlling the trading platforms is manipulated by the binary options firms to distort prices and pay outs.
Binary options fraud continues to spark concerns amid authorities in many jurisdictions, with the UK being one of the examples.
Derbyshire Constabulary has published a statement with regards to binary options fraud. The Derbyshire Police refer to the numerous reports received by the National Fraud Intelligence Bureau (NFIB) of binary options scams proliferating. In particular, the Derbyshire Constabulary is concerned by complaints about binary options firms refusing to credit customer accounts although the customers think they had made a profit.
The police believe that the binary options firms manipulate the software controlling the trading platforms in order to distort prices and pay outs, displaying that customer accounts are in profit whilst the customers are paying in; but then ‘losing’ all the accumulated funds in a series of trades when the customers attempt to withdraw their money.
In a grave conclusion, the police say that it is unlikely that any money was ever traded on behalf of the customers and their ‘profits’ never actually existed. The brokers simply seek to persuade the victims to invest more money.
The alarming announcement comes as regulators are becoming increasingly aware of the seriousness of binary options fraud. In February this year, the UK Financial Conduct Authority (FCA) published a report about complaints received by the Consumer Contact Center, with the report showing that binary options were the kind of investment products that registered the most growth in enquiries for the period from December 1, 2015 to November 30, 2016.
Consumers enquiring about binary options are usually advised to contact the Gambling Commission, which regulates operators offering binary options.
Let’s note that HM Treasury is bringing certain types of binary options within the regulatory perimeter along with the implementation of the Markets in Financial Instruments Directive (MiFID) II. The new rules are effective January 3, 2018. This means that certain binary options will be regulated by the FCA rather than the Gambling Commission.
There have been some positive developments on the marketing side. A number of British football clubs have decided to terminate their partnerships with binary options brands. In September last year, Southampton FC put an end to its partnership with Banc de Binary, which shortly after that halted its operations. A more recent example comes from Tottenham Hotspur FC, which has removed all information about its binary options partner EZTrader from its website, as the deal was quietly terminated.