The Which? Money Helpline is currently receiving up to 15 calls a month from victims of binary options fraudsters, with losses reaching hundreds of thousands of pounds in the worst cases.
UK consumer rights body Which? has earlier today made public highlights of its latest investigation into binary options, calling this industry “Britain’s biggest investment con”. The organization said the Which? Money Helpline is 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.
In addition, a new Which? Money investigation has exposed the malicious practices employed by by dodgy firms, including clauses that let brokers rig the market against clients, or treat client money as their own. The authors of the investigation have come across salespeople willing to say anything to get them to invest, and uncovered smokescreen tactics that make it hard for potential victims to see who they’re dealing with – or who they can really trust.
For instance, the site of 24option.com was among those checked by Which?. During the registration process the prospective clients were asked to confirm they were ‘sophisticated investors” and one of the firm’s representatives told them to sign the declaration, even though the potential clients told the firm they had no experience.
In the case of 72option.com, a representative presenting himself as David said that if a deposit of £250 was made immediately, he’d match the initial deposit. He didn’t mention the small print that meant the investors wouldn’t be able to withdraw any money until they’d gambled £12,500. David was pushing the clients to invest immediately so that they “could capitalise on ‘the buzz’ from the new Apple phone launch”. The Which? team calls this “absolute rubbish”.
The Which? investigation also stresses that for mobile traders, there are still plenty of these questionable apps in the Android and Apple stores. This remark is made several months after a number of brokers confirmed their binary options apps had been taken down from app stores. Google wouldn’t confirm to Which? that binary options broking is against its policy and Which? understands it is considering banning binary options outright. Apple didn’t respond to the questions.
At present, binary options are not regulated as financial products in the UK, but this will change in January 2018 when the Financial Conduct Authority is set 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 get hit by businesses that are not regulated.