The Australian Securities and Investments Commission, through its
SCAMwatch program, recently issued a warning about "binary options scams".
Scamwatch is warning investors to beware of binary trading scams
that lure you in with the opportunity to make money through asset price
movement.
So far this year Australians have lost $3 million to these
scammers.
Binary options involve predicting the movements of commodity, asset
or index prices over a short time. Although they may be a legitimate
financial product with many licenced firms trading in them, binary
options are speculative, high risk products that are almost impossible
to predict, even for professionals. There are groups of scammers who use
binary options to steal your money.
These scammers use high-pressure sales tactics to try and convince
you to invest in a trading account, making claims that the system is
simple and high profits are guaranteed. If you agree, they direct you to
a website with a login, account details and the trading platform. They
put your money into the account and demonstrate a number of successful
trades to encourage you to invest greater sums of money.
Once invested in the scheme, victims have reported that
their money begins to disappear quickly. When they try to withdraw from
the scheme, they find it impossible to get their money out of the
account. The scammer does everything they can to keep the victim in the
program but inevitably they stop taking the victim’s calls and, after a
short period of time, it is common for the firms to disappear.
If you receive a phone call or see an online ad offering binary trading
be very cautious. Do your research on the offer and the company. Do not
agree to anything straight away.
How these scams work
• You receive a call out of the blue offering a secure investment
with fast, high returns. You might also come across these scammers
through social media or online ads.
• The scammers have professional looking websites to help them appear
legitimate, usually with a login process, personalised account details
and a trading platform.
• The victim invests money into the account and either the victim or an
agent attempts to guess whether a particular commodity price will go up
or down over short intervals.
• If you guess correctly, the account is credited with a small return.
If you guess incorrectly, you lose the entire amount placed. The odds
are stacked against you so it is very likely that you will lose over
time.
• When you attempt to withdraw money, you find it almost impossible to do so and often lose the entire investment.
• Binary option scammers will also ask for personal information,
claiming they need it to transfer money or that it is required for
anti-money laundering purposes. Providing this information can leave you
open to identity theft.
Protect yourself
• Consider any approach for investment offers carefully, especially if
they are over the phone. Be suspicious of investment opportunities that
promise a high return with little or no risk.
• Check ASIC’s list of companies you should not deal with. If the
company that called you is on the list – do not deal with them. However,
if they do not appear on the list it does not mean they are legitimate.
• Check ASIC’s professional registers to make sure the provider has an
Australian Financial Services (AFS) License or is authorised by an AFS
Licensee.
• Do not let anyone pressure you into making decisions about money or investments – get independent legal or financial advice.
• Carefully consider who you are giving personal information to, such as
details from your passport or bank account, as this could be later used
for identity theft.
• If you are looking to invest your best bet is to just say no and look for a safer, less risky investment.
(
Source: NHW Queensland Blog article posted 18 Sep 2016)
