Binary Options Trading Scams
Thanks to better regulation, a robust online trader community and honest broker reviews, it’s a lot easier today to distinguish a legitimate binary options trading platform from an unscrupulous one. But, as with any international online marketplace, scams still lurk. And, while many brokers have a good track record and are regulated in your country, some have attracted higher than normal levels of complaints.
The scams aren’t just in the form of a high-pressure sales call or misleading marketing, but also include fraudulent brokers that don’t pay out winnings. These brokers will often refuse to honor a withdrawal request, freeze your account or even go as far as accusing you of fraud. Some of these brokers are even based overseas where there is little or no financial regulation.
It’s not uncommon for scammers to use multiple aliases and employ a range of tactics to lure victims. They may use fake names, spoofed phone numbers and even a fake address on their website. They may even try to impersonate a trusted individual or organization and pressure you to invest in their fraudulent scheme.
A common scam involves bogus signals from so-called “traders” who make claims that they can make you rich in very little time. These traders typically use automated software that generates trades based on algorithms that are supposedly designed to beat the market. However, these automated programs can lead to massive losses. In fact, a number of people have lost all their life savings by investing in these fraudulent schemes.
Another popular scam involves a so-called “boiler room” where individuals cold call prospective investors and talk about an amazing trading opportunity that is guaranteed to yield large profits. These boiler rooms are usually run by a group of individuals who receive commissions from the brokers they refer clients to. In some cases, these people can be quite convincing and lull prospective investors into making a bad decision. For more details please visit binary options trading scams
Aside from the above-mentioned scams, it’s important to remember that binary options are not a get rich quick scheme. If they were, there wouldn’t be so many shady brokers soliciting people on the Internet. In general, you should be very skeptical of any offers that promise to turn $2k into $8k in a week or more.
When choosing a binary option broker, check whether they are CFTC and National Futures Association registered and if they are based in the US. Moreover, they should be willing to disclose their physical address in the US and have customer funds held in segregated accounts in major U.S. banks. Any off-shore or unregulated brokers are a red flag and should be avoided at all costs. In addition, avoid brokers that have attracted a high volume of complaints both directly and on forums. This is a sure sign of poor service and potential fraud.