In 2017, the Money Helpline operated by Which? got inundated with complaints from people who could not get their “winnings” from binary options trades.
Binary options join soybeans and madcap cryptocurrency Electroneum in the ranking of the weirdest investment schemes of 2017, as per UK consumer body Which?. The organization notes that it received a flood of questions about rather extreme investment opportunities, with binary options ranked at the fifth spot, after Harry Redknapp-backed cryptocurrency Electroneum and self-storage units.
Let’s note that this is not the first time that binary options and cryptocurrencies are listed next to each other. On November 14, 2017, the UK Financial Conduct Authority (FCA) published warnings about cryptocurrencies and binary options, indicating its tough stance against the types of fraud involving such “assets”.
Which? says that in 2017 its Money Helpline was inundated with calls from people who have ‘won’ from binary options trading – only to find they cannot access their winnings. In other cases the trading platform was rigged to make certain trading outcomes more likely, the body warns.
In late November, Which? made public the highlights of its latest investigation into binary options, calling this industry “Britain’s biggest investment con”. The organization said the Which? Money Helpline was receiving up to 15 calls a month from victims of binary options scams. Losses are usually a few thousand pounds but, in the worst cases, the victims lose hundreds of thousands.
At present, binary options are not regulated as financial products in the UK, but this is set to change very soon as the Financial Conduct Authority is about to take control of the industry. Consumers will be able to take complaints to the Financial Ombudsman Service, but only if the company was regulated when they dealt with them. This will not be of use to people who have already fallen victim to dodgy companies, however, or those who suffer losses as a result of the activities of businesses that are not regulated.
The UK authorities have recently sought to clamp down on binary options fraud. On October 17, 2017, the City of London Police conducted a day of action, which involved visiting 20 offices with the City of London Corporation’s Trading Standards. At the end of October, the UK High Court wound up binary options scam firms behind Magnum Options, following an investigation by the Insolvency Service. And in early November, the UK Insolvency Service announced that two binary options firms – Right Corp Limited and Curve Point Limited, had been placed in provisional liquidation. The action followed an investigation by Company Investigations of the Insolvency Service.