Scams are unfortunately all too common in the field of binary options. Dishonest brokers and reviews, or stolen robots and auto trading services – scams can come in many forms. Therefore, we felt the need to create this blacklist and list all known scams and dishonest techniques in one place. We also go through the steps you can take to identify potential scams and how to deal with the situation after the fact if you are already a victim. If you know or suspect something is a scam, and we’re missing it on our blacklist, please let us know and we’ll look into it!
Why Are Fraud Stories So Common?
When any new financial instrument or form of trading emerges, various businesses tend to get involved. It is a fact that some product suppliers will be more reliable than others. This is certainly true of binary options. It is an accessible and popular way for individuals to trade the market. Moreover in their early days, binary options trading platforms tend to operate under the radar of regulators and from any country over the internet – so it’s no surprise that unscrupulous operators seek to take advantage. Thanks to better regulations, a strong online trader community and honest reviews, it’s now easier to tell a scam from a legitimate broker. But like any international online market, there are still some shady outfits that will leave you with less than you bargained for. So what are the red flags to look for? Here are the things to consider when you choose to choose your binary broker.
Are Binary Options Scams?
The term “fraud” encompasses a wide range of behaviors, from providing misleading information to lure you in, through draining account balances – and even dishonest trading advice. Likewise, certain brokers may not be fraudulently fraudulent in their conduct; only the services available on the platform (such as highly unreliable uptime or failure to repay funds on time) mean that this is a broker that should really be avoided. In all these cases, the problem is not with binary options as a concept, it is with the broker.
So, it’s a matter of doing your homework before you commit to any particular platform. User reviews can be helpful (if they are genuine), but always treat reviews with skepticism – and never make decisions based on testimonials published on the broker’s website. Even trader forums can be a problem – look closely and you’ll often find that the forum is an offshoot of a particular broker’s website. An independent, comprehensive and comparative review is the safest way to ‘cheat’ the examiner. Ideally, focus on review sites that allow and encourage real-life users to get contacts and report and problems with a particular broker, so you can make sure that what you read is up-to-date.
Trusted Broker in Malaysia
Here is an updated list of our 3 most up-to-date trusted brokers. You can find a list of all the brokers we recommend here.
Rules
The UK Financial Conduct Authority (FCA) currently regulates binary options. They have created a list of disallowed firms. While they don’t call them scams, they make it clear that these firms are breaking the law by trading with UK visitors – so they’re best avoided. The full list can be found here: FCA Invalid List
On the other hand, the United States along with most other EU countries consider binary options as financial products. Therefore, depending on where they are based, many platforms will be subject to oversight from regulatory bodies. Examples include the CFTC in the US and CySec in Cyprus. A platform’s regulatory status can be a very valuable trust indicator for traders looking to avoid fraud. It indicates that brokers should adhere to certain minimum standards when it comes to service and transparency.
“Too Good To Be True” Marketing
Taken in isolation, the act of placing a trade should be a simple one; and indeed, the usability of a platform tends to be a big selling point for brokers. Although this aspect of binary options is “easy”, it is quite different to claim that profits are guaranteed. Realizing profits through regular trading requires knowledge of how the market behaves, the ability to read market conditions and an understanding of strategy. If the risk is off – or outright false claims are made (along the lines of “95% trading success”), this is a false guarantee. It is a sign that the broker may be less than thorough in other important areas and the platform should be given a wide berth.
Terms and conditions
Transparency is important. Read the small print, and beware of unnecessary procedures for withdrawing funds. The terms of your initial deposit can be another source of dispute; for example, if you are denied access to the deposit until a number of trades are made – so your money is tied to the platform from the moment it is submitted. This deposit retention is often a broader term associated with ‘bonus’. CySec has tried to ban various terms by stopping the use of ‘match match’ bonuses. Non-CySec brands are still free to use it, so the T&C must always be checked.
Cold call
These tend to fall into two categories. The first is where you are called out of the blue and invited to sign up to a certain platform. The second occurs where you are already tied to the platform and you receive a call (or email) from a “senior broker” who points you in the direction of a particular trade. Reputable brokers don’t need to make cold calls. Remember “cold calling” may include email as well – any form of unsolicited approach should be considered “cold” contact and treated with extreme suspicion.
Channel sales
You should always be clear about who you are dealing with. In some situations, you may visit a site that appears to be a real broker, click a link to sign up only to be redirected to another broker. Alternatively the trading “service” can specify that you only use recommended brokers. These “funnel” sites are sometimes used as fronts by brokers with bad reputations, or work with them to deceive visitors (often using the misleading marketing mentioned above). A good broker will deal with identity from the start.
Managed account
It’s one thing for a broker to give you access to data and analytical tools to work out your own strategy (in fact, this is one of the signs of a great platform). It is quite another for the broker to also offer trading advice. After all, with an ‘over the counter’ option broker, you’re betting against the house; if the ‘house’ makes a trading decision for you, it is almost impossible that the decision will be in your best interest. This form of “upselling” is often the most profitable for the broker, and is usually where the trader loses the most. Encouraged by an “account manager”, traders are advised to deposit more than they can afford and more than trade. Sometimes large accounts will be deleted within hours. “Advice” goes against any sound money management, and increases the risk very high. Always be responsible for your own trading.
Price Manipulation
There should be fair and transparent benchmarks against which brokers set their prices. This benchmark must be what happens in the real world; which is the real time market price. If the broker has the right to set his own prices, you can assume that the figures will be skewed in your favor; in other words, a loaded deck.
Blacklist
Listed below have generated many complaints both directly and on forums. Disputes vary from upselling and encouraging traders to trade, without production and price manipulation. There is little trouble for traders to raise disputes with unregulated brokers, so it is usually advised that you look for a trusted binary options broker – preferably set up in your own country if possible. “Scam” has been widely used as a term to refer to any form of bad service, but it should be noted that many of these brokers may not be doing anything dishonest or illegal, but have attract higher than normal levels of complaints. If in doubt, trade elsewhere. There are many honest brokers out there.
Robot Scams And Signals
These signal providers, or robot services, are either fraudulent or not recommended for other important reasons.
Instagram And Facebook
Beware of scams operating on social media. Again, binaries are not a get-rich-quick scheme. There are a large number of accounts that promise to trade on your behalf and turn $2k to $8k in a week. If these claims are true, the people behind them won’t need to run ads or sign others – they’ll just trade.
Successful trading screenshots are very easy to get – even true. But these operators are unlikely to interfere with trading – when you send them money, it’s gone and you won’t hear from them again (unless they think they can get you to deposit more). Always choose your own broker, and always be responsible for your own trades – never let someone else trade on your behalf. If you don’t understand binary options, or don’t have time to trade – then don’t trade at all. This scam often falls prey to inexperienced people.
What To Do If You’ve Been Arrested
Do you think you have been a victim of a binary options scam? Read on to find out what you can do if you have been infected.There are many ways to help make sure you don’t fall victim to scams but the reality is that even if you follow all of those tips there is still a chance you will get scammed. If that happens, what do you do? Did you sit down and take it? Are you giving up on trading? No, you have to stand tall and see for yourself. Trading is good, it’s rewarding and can lead to a life where you don’t have to go to work and punch the clock. You can’t let the actions of one broker, signal service, robot or guru stop you from that path. This article looks at what you can do if you think you’ve been scammed. There may be a problem that will not be able to earn your profit,
MyChargeBack.com is a firm that specializes in helping victims of binary options scams. They help the claimant to explain the incident to the bank or credit card company, so that they fully understand what has happened. Some banks are not aware of binary trading and do not want to listen to claims. MyChargeBack helps in this situation. They have a strong record of recovery from genuine claims.
If you haven’t sought third-party help, here are some steps you can take yourself:
- Document everything. The first thing to do is make a record of everything. This includes the broker, or SSP, terms & conditions, a copy of any email / Skype / live-chat you have with them, confirmation of your deposit, redemption requirements for bonuses and your trading history. No matter what you do next, this information is needed to get satisfaction. What you do next will depend on the type of scam you’ve been a victim of.
- Trying to withdraw.Broker won’t let me withdraw. Contact the broker and try to find out why they won’t let you withdraw. The most common reason is that you did not send the correct ID documentation, something that is required by international law, and is an easy problem to fix. The next most pressing reason why withdrawals are not allowed is because of bonus terms and turnover requirements. If you have not met the requirements, you will not be allowed to make any form of withdrawal, which is why you want to keep track of all your trading volume and trading earnings. If you didn’t receive the bonus in the first place your documentation will help you prove it. A good broker will try to solve your problem,
- Make your voice heard.Broker keeps giving me the run around. If your broker is giving you a chance and won’t discuss your issues, the best path to satisfaction is to let the community know what’s going on. After all, it’s the wheels that get the grease. You can do this by posting a complaint, with details, in a forum like here on Binaryoptions.net. When you do this make sure you let the broker know and send him the link. They may not care, the sign of a shady broker, but when it comes to a reliable broker they will want to deal with your problem to avoid bad publicity. When submitting a complaint providing as much detail as possible, simply saying that the broker cheated you is not enough,
- Contact their payment provider. Brokers won’t help, now what? At this point the chances that you’ve been infected, and not just suffered from miscommunication, are pretty high. If you are not satisfied with your broker, you need to take more drastic measures. If you deposited with a credit card this may mean calling the card company and asking for a refund. Let them know the upfront charge is a scam and that the company in question does not return your contact request for best results. The Times Of Israel reports that the fraud victim was able to get a full refund of his deposit after contacting the financial institution that processed the broker’s payment. They withhold payment until the broker meets the claim.
- Call the regulators. Time to call in the big guns. The good thing about expanding binary options regulation is that there is an alternative for many traders who think they have been scanned, you can contact the regulator. In some cases this can be a challenge as many brokers are located offshore and hidden behind parent companies and virtual offices so be sure to do your homework. If the broker is regulated, contact the agency that oversees them, if they are not regulated by contacting the agency that oversees financial regulation in your country. If the broker is regulated, they need to address your issues, to the satisfaction of all parties, to remain compliant.
- Go ahead. Brokers like to hire people who are good at arguing questions and complaints, don’t accept what they say. It may take time but eventually you will talk to the right person, or people, and your case will be dealt with. What is most likely to happen is that a combination of your contact requests, forum complaints and charges with regulators will add up to one thing, the broker giving you your money back to avoid more hassle.
How to Spot Scam Trading Strategies
The internet is loaded with ads, articles, companies and individuals trying to give you the next big trading strategy that will make you rich overnight. Take a break my friend, here are tips to help you spot scams.
System or Just Strategy?
First and foremost trading strategies will not help you become a good trader. What you need is a whole system. When you create a trading plan, it should cover how you will enter the market, exit the market and how you will manage your money. It should also tell you under what market conditions you are doing all these things. That’s the system, it tells you everything you need to know about how you’re going to trade. Strategy on the other hand only tells you when to enter and exit, and may not tell you under which conditions it works best or not. It also cannot provide guidance on position sizes or whether you can trade multiple assets at the same time – very important issues to answer. In other words, the strategy may be missing the information you need to succeed. We need a complete trading system… but marketers are smart, so they can easily just call the product they sell a “system” to make it more complete. But is it? Here are some things to watch out for to throw out your product as a possible waste of money:
Boxed system
A boxed system is one where you can’t tell how the strategy works – it’s an obscure “black box”. For example, the product could just be some indicator or service that tells you when to trade, but not why. This won’t make you a better trader, because you don’t know what’s going on behind the scenes. If the signal product or service stops working, you are at a loss. Even if you make money with a product / service, you have to start from scratch again. Make sure that if you buy something it explains how it works, so that in the end you don’t have to rely on the product / service.
Very high Win Rate
Is it possible to get a 90% win rate? Of course, but it is also possible to lose money with a 90% win rate. Statistics can easily be manipulated to tell partial truths or tell lies. Another popular tactic says things like “Make $500 in one day!” So what? That doesn’t really tell you anything. If that is on a $1,000,000 account then making $500 is not that big. And if they lost $3000 the day before, then just making $500 today and bragging about it is quite difficult. Read what is implied. What is not said? To understand performance, you need several bits of information: Account size (capital), percentage return, total risk per trade, total profit per trade, win/loss ratio, biggest winner,
There are also some other metrics that can help you, but if you ask the company for this information, and they can’t or won’t give it to you, be suspicious. You can usually get an idea of the system’s vulnerabilities and tendencies by looking at the statistics above. One of the main points is that the strategy needs to be tested over a long period of time, and in all market trends – uptrends, downtrends, ranges, volatile and calm conditions. It’s not necessarily profitable in every one of these environments, but it’s at least been traded through them all so you know that the system as a whole profitable. Often marketers will only publish results for periods where the strategy performed well. But this does not give you a real idea of how the strategy or system works over the long term.
- In relation to statistics there are other things you need to consider. If the system is profitable, the result is based on all trades. If you bought the product or service, would you sell it all? The issue that many traders face when subscribing to signal services is that they do not trade all signals. If you do not trade all the signals then your personal results may differ dramatically from the typical results from the service.
Only One Direction
Avoid systems that only trade in one direction, for example only buying assets but not selling them short. Markets go up and down, you want to participate in both trends.
No Trial Period
You should be able to test the product and be able to cancel without fuss if the service isn’t for you. Usually a quick trade forum search on Google will reveal what other people are sharing about the product or service. No try, no deal. Don’t trust anyone, test things for yourself. If they don’t let you, then watch out.
Final words on identifying fraud
A product or service should not make you dependent on it. It should show you behind the scenes so you can finally trade on your own. A good product will always have customers because there are people who don’t want to do the work themselves, and there are always new dealers. There is no reason to make every client completely dependent. Be careful with discarded statistics. Ask yourself what statistics don’t tell you. Also, if the statistics they provide are valid, then you need to trade all the signals to take advantage and get the special results of the service. Of course remember, past performance is no indication of the future. That’s how it pays to do homework, and ensure that the strategy / system / service / product is based on a long history, and has proven itself to be profitable over all types of market conditions. Test the product / system / service before buying it. If they won’t let you try, be suspicious.
Case Study – JV Affiliate Marketer
In this section, we will see how you can avoid being scammed by Binary Options JV Affiliate Marketers. It’s not that hard, but requires you to let go of your emotions and examine things in a logical way, because most scammers use greed / emotional fear tactics to get your money. Once you understand this, you can quickly and simply save your time and money with this irresponsible dolt. Some scams just shine in how stupid they are, while others can be very good at the job of luring you with seemingly genuine people/systems/reviews (as opposed to you), as you can see on your $0 balance who wondered ” Where did my money go !? “.
As you will see in many scam videos, all you have to do is “NO DEPOSIT” then this scam no longer works. So the next time you see a video of a similar nature, just know they are supporting a fraudulent system / marketer. Understand if they require their deposit fly by night and even if they do not support scammers with the nature of requiring you to deposit with a new broker. So just refuse to deposit and they leave. Not the same stories and repeated promises to get you to sign up for their “free” systems / bots … They are not free to deposit and they are paid on those deposits … So remember time / fast money / can not be lost! / just fund your account = don’t do it!
In this image above, you can see many fraudulent systems connected to each other on the same server most often. These JV marketers have many of these turnkey scams because they are very low maintenance. The reason you see so many of them is that after a few weeks of a new story line being marketed and getting boring, they’ll start production on another one and keep everything fresh and new thus avoiding the wrath of their old cheats that they complain about and share with others. If they keep it new they will avoid this along with the fact that most beginners jump from one scam to another hoping this one will work,
Case Study – Fraud on Social Media
Social media is the “perfect” platform for scammers and can be more dangerous and convincing, and unlike JV marketers these people will talk to you directly, but only one point. Once they think they can’t get anything more from you or that you no longer have any value to them, they will be your friend in a heartbeat. The one thing they’re all after is your money, so make sure they ask for a deposit or signup that tells you about the incredible profits and opportunities, which will leave you empty-handed. Videos like those used with “The Green Room” and “Group Wealth FB” will pretend to be traders / friends,
Also – if you see them mentioning anything related to MLM ( Multi Level Marketing) , they are trained to lure you, so run the other way. These guys don’t play around and will say what it takes to get you to sign up and invest. There is a 45-minute interview for someone who has been scanned by both the “Green Room” and the “FB Wealth Group”. We call it the Binary Option Beast Option because that’s right in all its details. If you’re new to binary options, read the warning signs above to see how they scam people out of their money so it doesn’t happen to you. Also note how the work with live brokers, which shows that they can also be directly involved.