Majority of binary options trade are conducted via online brokerage platforms, which not necessarily adhere to the US regulatory prerequisites and may possibly be engaged in fraud activities. Therefore, investors need to be familiar with how frauds are promoted via binary options brokerage platforms.
What really is Binary options?
Binary options is a kind of agreement, where pay-out depends totally on results of yes/no proposal made on whether a specific underlying asset price will increase or decrease within specific timeline. After you acquire an option, there is no more decision holder needs to make because binary options workout automatically. The holder has no right to sell or buy the underlying asset like other kinds of options. On expire of the binary option, the holder receives pre-determined cash winnings or no money at all.
What kind of complaints Investors make regarding fraud Binary options Brokerage platform?
The SEC receives numerous fraud complaints associated with online binary options brokerage platforms. The complains can be characterised in three categories –
Refuse to reimburse Customers Funds
Complaints typically involve investors who have already deposited amount on the brokerage platforms trading account and often persuaded over phone to deposit extra funds. When the investor tries to withdraw the winnings as promised or their original deposits, the brokerage platform cancel’s their withdrawal request or just ignore their emails or calls.
Identity theft
Certain online brokerage platform gather customer’s personal information like driver’s license or credit card for not mentioned use. Beware, if online trading platform asks for Xerox copies of personal data then never provide them.
Manipulated Software to produce losing trades
There are complaints that online trading platforms employ their personal trading software to twist binary options price and pay-outs. For instance, when you hold a winning option, the countdown for expiration gets subjectively extended until your trade turns into a loss.
What to do if scammed?
If you are scammed then –
- Document everything
- Try to withdraw
- Post complaints on forums and send broker the link
- Request a chargeback, if deposits are made using credit card
- Contact regulators
- Be persistent
Chances that with all the above steps, the broker will return your money to avert bigger hassles.
Always check before Investing
To avoid all the hassle of falling prey to Binary options scam, it is wise to do a little research on the brokerage platform.
- Check to see, whether the potential brokerage platform is registered with SEC for sale of specific product. Registration will offer investors access to main information on the kind of product that is offered.
- Even check if binary options broker is registered with an exchange. It can be checked on SECs site related with Exchange.
- To find out if the potential brokerage firm is designated contract market check CFTCs website.
- Before investing check registration and background on FINRA’s BrokerCheck and BASIC. In case there is no verification about their being registered avoid trading with them or make a deposit or share personal information.
Hot tip
If you buy binary options through unregistered entities, you may not benefit from federal securities & commodities law, which have been designed to safeguard investors connected with registered brokerage firms.