How to avoid a binary options scam?
When discussing any potential binary options scam the most important thing to recognize is: if you do your due diligence, you will be armed with the right information, If you do your due diligence, you will have nothing to worry about and can implement your binary options strategies with peace of mind. Having said that, it is important to acknowledge that the internet and financial industry are home to some unscrupulous actors. Armed with the right information, you will have the tools to avoid the pitfalls along the way to earning extra income through binary options.
To avoid binary option scams, you should have in mind the following 4 rules of thumb when looking to open an account with any binary platform.
4 Rules of Thumb for Avoiding Binary Options Fraud
- Make sure the platform is regulated – Any reputable broker will feature their regulatory credentials with pride, because they have nothing to hide. Each country has its own regulation so make sure the platform is registered with a respected, competent regulatory authority such as CySEC.
- Pay attention to broker reviews – The internet is filled with customer reviews. The best companies know the way to success is through customer satisfaction. If you see a large amount of negative reviews about a broker claiming fraud or scams, and the broker hasn’t responded, it should raise a red flag. Be extra careful about using this broker.
- Listen to what others are saying – Play an active role in online communities that discuss binary options. Chances are somebody in a forum or chat room is also interested in avoiding online scams. By sharing information, you will be sure to only use highly regarded platforms.
- Don’t go all in too soon – Make sure to thoroughly review each new binary options platform before you commit. You can prevent many scams by making sure the platform offers everything you need to implement your binary strategy including quality customer service, and helpful and accurate advice.
What are types of binary options scams are there?
As I mentioned above, credible brokers are registered with internationally recognized regulatory bodies and thus are transparent about their activities. If you come across a binary platform that advertises non-credible regulatory authorities, or even worse, is not registered at all, chances are it is a scam.
The U.S. Commodities Futures Trading Commission has categorized the various scams to look out for. According to the CFTC, fraud complaints fall into one of at least three categories: refusal to credit customer accounts or reimburse funds to customers; identity theft; and manipulation of software to generate losing trades.
Refusal to credit customer accounts:
The first category involves the refusal of certain binary options trading platforms to credit customer accounts or reimburse funds after a customer deposits money on the platform. When customers later attempt to withdraw their original deposit or the return they have been promised, the platforms make the withdrawal process very difficult. This can be avoided by making sure you receive quality customer support before depositing on the platform.
Alleged Identity Theft:
Customer have complained to the CFTC that certain platform have requested consumer information for unspecified uses. This can be easily avoided. If a binary options platform requests a copy of your credit card or driver’s license, don’t provide it.
An important footnote: New binary option traders may accidentally confuse the standard identification process implemented by all brokers for the purpose of user safety for an identity theft scam. This is necessary to make sure that the customer asking for the withdrawal is the same as the account’s depositor.
These complaints allege that binary options trading platforms manipulate the software to alter binary options prices and payouts. An example of this sort of complaint is that when a customer’s trade is “winning,” the expiration is extended until the trade becomes a loss. This is another reason why it is important to test the software before you make a financial investment.
Make sure to review a list of credible brokers that have the highest level of regulation.
What to do if I fall for a binary options scam?
Okay, so you’ve fallen for one of the binary option scams floating around out there what do you now?
If you are completely confident that you accidentally signed up with a fraudulent broker, you can dispute the the transaction with your credit card company. In some cases you will be able to cancel the entire transaction, but the burden of proof will fall on you to prove that it is a scam. Depending on your credit card disputes can take up to 30 days or longer. Additionally spread the word in reviews, forums, and chat rooms so other investors to fall the scam.
List of Scams