Scams using binary options are unfortunately very common, as you know from our list of scam brokers and services. If you’re concerned about victims, this guide explains how to avoid scams in the UK.
Are Binary Options Scams?
In short, no. Binary is, in our opinion, a good product. However, there are unscrupulous brokers and other service providers out there who practice unknown traders. This is because both binaries were unregulated and unmonitored when they first came to the market – which happily has changed a lot in recent years.
But with scam artists still out there, what can users do to avoid binary options scams and focus solely on their trades? Read this tutorial on scams and only trade with trusted brokers!
Cheat lists may not always be useful though – operators close and open them so often that maintaining the list becomes a full-time job. A better option for consumers is to look for warning signs, and if there is any doubt at all – just switch to another provider.
The scam list can only protect you from the threats that exist today – learning how con artists operate and mislead consumers can keep you safe for years to come.
There are several methods by which scams associated with binary options will try and make money. However, there are also some obvious red flags that can alert users that all may not be well. As always, the old adage ” If something seems too good to be true, it probably is ” applies. If you find any of the below, I would advise treading carefully – and if in doubt, let a certain broker – there are many reliable and trustworthy brokers. There is no need to take risks with any company you may have doubts about.
Top 3 Trusted Brokers
For those who just want to avoid scams and start trading without reading this entire guide, go to any of these brokers:
Restoration
A service called MyChargeBack.com offers consulting services to help victims recover their money. They offer a free service to tell you if you have a case. Things like unpaid withdrawals, or unauthorized payments can be claimed through banks or credit card companies, and this firm specializes in dealing with such organizations. The range of services varies from case to case, but they may be able to help:
How to Avoid Scams
Pay attention to the warning signs listed below!
Cold call
A reputable broker will not propose new business by making cold calls and calling you out of the blue. It is possible that calls made in this way will involve unrealistic claims about binary options, and the potential profits to be made from their trades. These may include promises of immediate, high returns, and reduced risk.
In addition to phone calls, some operators may also send direct emails, in some cases, suggesting an account has been opened. Any way of getting these contacts is an immediate warning sign. Hang up, and delete any mail.
Bonus Terms
A frequent source of issues is through deposit bonuses. Dishonest brokers will often have some unethical terms. This may include tying the initial deposit until a number of trades have been met (revenue requirements). They will include the initial deposit (not just bonus funds).
Effectively deposit their money as soon as it is submitted. Make sure you read these terms before claiming the bonus, or making a deposit.
Automated trading
These warnings include robots and automated signals, but also managed accounts, where an account manager has promised massive profits. There is a clear conflict of interest for this account manager. If you make a long-term profit, the broker makes a long-term loss on your account.
An account manager, employed by a broker, is highly unlikely to have your trading interests. Although they may argue otherwise, letting someone else trade for you will most likely result in a loss. These managers can also encourage traders to invest way beyond their means, which is very dangerous.
Binary options are a high risk / high reward investment. The risk cannot be hidden from you by your broker or account manager.
‘Make Money Online’ Marketing
Many related warning signs – marketing forms again hide the risks – such as cold callers and account managers. The “ Make money online ” and “ Get rich quick ” marketing around binary options is very irresponsible.
There are many websites, with high production videos that look very interesting. They will suggest making easy money, maybe even suggest they copy famous investors. This is all a scam.
Any promotion that hides, or downplays, the high risk nature of binary trading is dishonest. Binary options are not a way to make easy money, and should not be sold this way. The form of advertising for binary options is generally the most dangerous for users. If you encounter marketing like this, do not continue.
Sales Funnel
A funnel is a website that will direct traffic to a broker. As a visitor to the website, you may not realize that you have been redirected to a broker.
These funnels usually handle the “rich” marketing described above, but not always. The issue here is that users will be handed over to a broker, which they know nothing about. After visiting the funnel, the new customer will get a call from a random broker asking for a deposit.
Although this may sound strange to those who are not affected by it, the effective selling of binary options scams by channel websites, means that many people are being cheated.
Price Manipulation
Some brokers will include a line in their terms along the lines of: “Our prices may not reflect the actual market”. Unfortunately, it won’t be spelled out like that, because the implication is clear – they set their own prices.
If the broker is the counter party to any trade, and they also set the price, it will be very difficult to make a profit with that broker.
Clients trade with brokers, and they determine the closing price. One of the two parties will make a loss – and it won’t be the broker.
Research the terms of trade and be wary of any mention of settlement figures based on anything other than real world prices. So, these are some key warning signs that should make potential new traders stop and question what they’re being told. If you have found any of the above, identify the broker involved – and trade elsewhere.
In addition, new traders may try and conduct their own ‘due diligence’ on the brand. However, this may carry risks. The reason is, as well as scam operators, there are reviews of websites that are also dishonest. There are several ways that users can protect themselves and find reliable reviews.
The first method is to look at the offer elsewhere on the review site – if other scams are being promoted, then the review cannot be trusted. Ask questions about this website:
- Is there a proliferation of robot ads?
- Are there promises of high returns?
- Is there sufficient risk exposure?
- Can you contact the website, or the site owner?
The second method is regulation. In the UK, the Financial Conduct Authority regulates a number of binary options brokers. This is only the case where the broker offers a form of trading that is already covered by FCA rules – Contracts for Difference (CFD) for example.
The reason this is important is that FCA-regulated firms need to be careful about who they promote too. If a binary options site lists FCA regulated brands (as we do!), this shows a level of credibility and protection.
The site must be completely honest about the high-risk nature of binary options, and it must have responsible, UK-based individuals operating it. If not, then the FCA firm will not allow their brand to be marketed by them. Here, is another level of complexity. Several binary options brokers have sought to register with the FCA.
This is not the same as being controlled by them. For firms regulated by the FCA, they need to offer additional forms of trading, not just binary.
A brand that offers only binary options will not be fully regulated by the FCA. This is because binary options are now regulated and licensed by the UK Gambling Commission. So the list of binary options brokers regulated by the FCA is actually very small. Reference
- FCA – Consumer Advice
- UK Gambling Commercial Intelligence Trade (Find a list of licensed brokers from these pages)
FCA List of Invalid Brokers
In addition to the services below, the FCA has published a list of firms that are not authorized to trade binary options in the UK. While stopping short of calling them scams, the list provides a picture of firms willing to break the law (by offering unregulated trades). They are indeed best avoided. The list can be found here: FCA invalid list .
Blacklisted services
British method
The marketing used here is a clear red flag. A video suggesting more than £500k has been made in under a month is about as clear as it gets. Unfortunately the claim is not true. This is an outright scam, avoid the “Brit Method” or any related schemes.
This includes “Jason Taylor” and any “millionaire” maker scheme associated with that name, or the Brit Method. The Brit method is a scam that has been used before. Here’s what you need to know to protect your money;
What is the Brit Method?
The Brit Method promises to be a binary options trading strategy that can make you hundreds of thousands of Dollars in a matter of weeks.
Unfortunately, this is the latest iteration of an old scam. The Brit method is nothing new. It was previously called the Aussie Method and the Canuck Method, and each time the site was shut down due to its bad reputation. Even the man who supposedly invented the genius trading style is the same.
Jason Taylor
It’s always the same stock photo, just the name changed from Jake Mason to Jake Pertu and now Jason Taylor. There are many fake testimonials on this site, but make no mistake they are all made up with stock photos of people who have never heard of the method.
Likewise all the promises made by the Brit Method are lies. The site basically promises unlimited profits, but provides little information on how it intends to achieve this goal. The site also promises to get you started for free, which is also a lie.
After you complete your free registration, you are denied access to the system unless you deposit $350. But if you make a deposit, you still have no access because there is no system. The money is gone, and you will never see it again. Avoid the Brit Method at all costs.
Also, find out about all the upcoming cheat versions. In all likelihood, there will be a German Method and an American Method and they will most likely use the same method to help people.
Copy Buffet
Again, the sales pitch is a clear red flag. This is a scam, stay away. The scam shows that customers can enjoy wealth by following the method created by Warren Buffet. An investor famous for taking long positions, this fraud has absolutely nothing to do with Buffet himself.
This process involves visitors being forced to join a specific broker (another scam tactic explained above) and make a deposit to gain access to the “system”. No system exists, and traders will not earn any funds. Avoid.
Ultimate4Trading
The good news here is that the Ultimate4Trading website has been blocked for UK visitors. The operation is dishonest and should be avoided.
The Millionaire Blueprint
Another scam which is again, thankfully prevented in the UK. Again, the promise of “get rich” is at the forefront of marketing but the entire operation is a scam. Either way this website is now a haven for malware. Stay away.
Instagram & Facebook
Many scams promote themselves on Instagram and Facebook. Most will fall into the categories listed above. Mainstream media have also been duped in the past, including the Daily Mail. These promotions or accounts make wild claims of profits that can be made, supported by images of flash cars and other trappings of success. It is all a lie and this operation should be avoided at all costs.
If these people can really turn £2,000 into £8,000 in a week – why do they need to advertise on social media? They can just make as much money as they need from the market and go and spend their time at the beach. Screenshots are easy to fake – and they don’t have to show losing trades.
Anything promoting a ‘get rich quick’ route using binary options is not to be trusted, full stop. Also remember that Martin Lewis (of MoneySuperMarket fame) is considering legal action because Facebook isn’t doing enough to remove ads it claims to support. To repeat his quote ” Martin Lewis doesn’t do commercials “. If an ad mentions it, avoid it at all costs – it’s definitely a scam.
Broker Blacklist
Here are some brokers where we have received reliable reports of poor customer care, or worse. Again, many of the tactics used are covered in our article to avoid scams – this list is unfortunately not exhaustive, so if any of the actions below sound similar to other brokers you’ve come across, stay away from them – and let us know.
Most of the worst brokers have said thank you, but always be aware of using unregulated brands unless you can verify their quality. Not all unregulated brands are untrustworthy, but it does mean more ‘due diligence’ is required.
72 Options
The bonus term locks in the initial deposit until the x30 turnover requirement is met. Your deposit is yours until you choose to trade. A broker cannot prevent the withdrawal of your deposit before it has been traded. Avoid.
Optec
Opteck is now closed for business. Tighter regulations introduced by CySec (which monitors Opteck) have left firms with no choice but to stop trading. Increased regulation helps the industry by cracking down on firms that use misleading marketing, or fraud, to get money from clients.
Boss Capital
Boss Capital is a popular broker that accepts US traders. The lack of strong regulation allows them to operate using questionable methods. They are other firms that have closed as a result of better regulation.
StratX
StratX is a firm brought to the attention of disgruntled customers (see testimonials page). Firms use cold calling, account managers and make withdrawals very difficult. Not encouraged.
CFDStocks
Other firms we receive a lot of correspondence about CFDStocks. They use most of the tactics discussed above, including cold calling. Most contacts we receive say account managers encourage larger and larger deposits before disappearing.