France’s financial ombudsman: Forex, binary options complaints volume drops but concerns remain
The number of Forex complaints received in 2017 fell by about 50% from the preceding year.
France’s AMF Ombudsman – Marielle Cohen-Branche has earlier today published the Annual Report for 2017, indicating that the volume of complaints concerning Forex and binary options trading has fallen but concerns about fraudulent practices employed by companies engaged in this sectors remain.
The number of Forex complaints received in 2017 fell by about 50% from the preceding year, the ombudsman says, noting the positive effects of the work of the French financial markets authority AMF and the recently introduced Sapin 2 law. The latter prohibited all types of digital advertising and sponsorships related to toxic products like binary options.
The ombudsman received a total 1,361 submissions (enquiries, complaints, etc) in 2017, down 9% from 2016, and issued 506 opinions, down 5% from 2016 levels.
Forex and binary options trading are among the main reasons for the complaints that the AMF ombudsman received in 2017. However, their number has markedly fell compared to 2016 levels. There were 55 files concerning Forex that the AMF ombudsman investigated in 2017 – this number reflects the cases targeting licensed companies. There were 43 cases that were transferred to prosecutors as the entities in question were not regulated.
Alike previous years, the entities targeted by consumer complaints were mainly ones registered and regulated in Cyprus, as the European passport regime allows such companies to offer their services in France too. Although a broker may have a number of warnings and disclaimers on its website, the talk with a sales representative of a company usually depicts a very different picture, the ombudsman noted. During such “chats”, astronomic and guaranteed gains are promised, along with hefty bonuses.
The investigated and closed files concerning Forex and/or binary options have resulted in 67 decisions in favor of investors in 2017. Almost all of these decisions were followed by the companies involved. This allowed to help investors recover EUR 1.05 million from a total of EUR 1.82 million of losses suffered. The sums that investors claim to have lost vary from EUR 250 to EUR 88,500. The average loss is EUR 17,646.
The ombudsman is barely satisfied with this result and notes that there are tens of thousands of people affected by Forex and binary options fraud. That is why, she is pushing for a total ban or harsh restrictions on the offering of complex and toxic financial products to retail investors.
This direction has been pursued by the European Securities and Markets Authority (ESMA), which in March this year said it would ban binary options offering to retail investors and would introduce restrictions to CFD offering.
