de | cn | ru

Market News

FCA: Brits lose GBP 87 000 to binary options scams per day

Feb 02 2018
By
Jonathan Smith

 Brits lose an average of GBP 87 000 a day to binary options scams, said UK’s financial services watchdog the Financial Conduct Authority (FCA) in its latest advisory.


In the publication the FCA urges the public to be vigilant to the threat of online investment fraud. The watchdog warns that fraudsters offering investments in binary options, contracts for difference (CFDs), forex and cryptocurrencies (such as Bitcoin) often promote themselves online and via social media channels, such as Facebook, Instagram and Twitter. They promise high returns and use images of luxurious items like expensive watches and cars and yachts to lure the people to put money in the scam.


After that, they usually distort prices on their website or refuse to return the clients’ funds using all sorts of excuses and citing impossible withdrawal conditions or simply shut down the client’s account and disappear with the money.


According to the FCA, both the promotional channels and the profile of victims are changing. Now the online ads have overtaken the scams done via telephone and younger people are more likely to fall for the enticing offers. Quoting data of Action Fraud, FCA says that people under the age of 50 are far more likely to become victims of binary options fraud promoted on some social media network.


Earlier this week the largest social media platform Facebook announced it is banning ads of binary options, ICOs and cryptocurrency investments across its network and partnering sites, including Instagram.


As people have become more skeptical of investment-related cold calls and consumer habits have changed, we have seen investment fraud moving online and to social media”, said Mark Steward, Director of Enforcement, FCA.


Worse still, the younger people are more likely to believe the testimonies on the scammers’ sites and to not conduct any check or research on the company and the offer. The FCA notes that the scammers often create highly professional looking online investment platforms that feature fake customer reviews, logos, and statements, to lure in prospective investors.


'While their websites and profiles appear to be professional, they are all too often run by fraudsters who fix prices and pay-outs, or in some instances don’t really place trades at all, before disappearing with innocent investors’ money“, Steward noted. “Before investing online, check you know who you are really dealing with and check if they are authorised by the FCA. Find out how to avoid scams on the ScamSmart website, and if in any doubt – don’t invest.”


Until the beginning of this year binary options companies were under the supervision of UK’s Gambling Commission and were largely unregulated. Since January 3, 2018, however, the FCA took over the oversight of this type of investment services and now its strict requirements apply to binary options brokers. Since then, the FCA has published a list of 94 binary options companies operating in the UK without the appropriate license.


TAGS: uk  fca  binary options  cryptocurrency  scam 
Broker Country Regulation Platform Min Deposit Review
US CFTC, NFA MT4, Web,
in-house
$50 Review Website
US NFA, CFTC MT4 $250 Review Website
Cyprus, UK, Mauritius CySec, FCA, FSC MT4, MT5, Web $10 Review Website
Australia ASIC MT4, MT5,
IRESSTrader
$100 Review Website
Cyprus, Australia CySec, ASIC MT4, MT5 $5 Review Website
UK, Australia, South Africa FCA, ASIC, FSCA MT4, Trading
Station,
NinjaTrader
$50 Review Website
UK, Cyprus, UAE, South Africa FCA, CySEC, DFSA, FSB MT4, MT5, FxPro
Markets,
cTrader
$100 Review Website
Cyprus CySEC MT4, MT5, Web $1 Review Website
Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website
Australia, UK ASIC, FCA MT4, MT5,
cTrader
$200 Review Website

More Forex Market News

Malta restricts CFD sale to retail clients permanently

Aug 20 2019 16:28:19

The Malta Financial Services Authority (MFSA) adopted permanent rules restricting the marketing, distribution or sale of CFDs to retail clients. Read more

$3,5 bln Bitcoin Ponzi scheme Plus Token pressures the markets

Aug 15 2019 17:42:11

The fraudsters behind the China based Ponzi scheme Plus Token are dumping bitcoins worth over 3.5 billion USD on exchanges around the globe, and that is creating a selling pressure on the markets, venture capitalist Dovey Wan warns. Read more

Spain’s CNMV blacklists EurTrades, Trade100, and Key Markets

Aug 14 2019 13:54:57

  The Comision Nacional del Mercado de Valores (CNMV) updated its warning list on Wednesday with several offshore brokers - EurTrades, Trade100, and Key Markets. These entities are not authorized to provide investment services or investment advice in Spain, the CNMV said. Read more

Former binary options broker iTrader to be indicted in Israel

Aug 13 2019 14:07:37

  Israel’s state prosecutor announced that it intends to indict the company behind former binary options broker iTrader, its owner and senior officials, on charges of aggravated fraud and providing investment advice without a license. The company Gal Media Trade Ltd. Read more

CySEC warns of fake recovery agents claiming to be its employees

Aug 12 2019 20:32:52

  The Cyprus Securities and Exchange Commission warned against fraudsters impersonating its officers who are running a recovery room scam. Read more

Aussie crypto scam worth A$2.7 million busted, five arrested

Aug 08 2019 15:46:37

  A criminal group in Gold Coast, Australia were arrested for allegedly scamming over 100 Australians with A$2.7 million in cryptocurrency investment. Read more

EtherDelta investigated for exit scam

Aug 07 2019 12:01:50

  Chinese police are reportedly taking legal action against cryptocurrency exchange EtherDelta in connection with an alleged exit scam.    The news was actually reported in a series of tweets by the ex-owner and founding partner of the exchange Dovey Wan. Read more

BaFin warns against 4xincome, orders it to cease operations

Aug 06 2019 15:44:28

  The German Federal Financial Supervisory Authority (BaFin) blacklisted unregulated forex broker 4xincome and ordered it to cease operation in the country. The regulator said that this broker offers German clients trading in forex and various CFDs thorough its website 4xincome. Read more

Thailand’s AML laws will also apply to crypto exchanges

Aug 05 2019 16:57:59

  The Secretary-General of the Thai Anti-Money Laundering Office (AMLO) stated that the existing anti-money laundering (AML) rules in Thailand will be amended as to also cover cryptocurrencies and prevent their use for illicit activities, as reported by local news media BangkokPost. Read more

ASIC warns against Alpha Financial Group, MGM Markets, and Brokerz.com

Aug 02 2019 16:06:03

  The Australian Securities and Investment Commission (ASIC) has updated its warning list today with Alpha Financial Group, MGM Markets, Brokerz.com, and several other unregulated brokers. Read more

de | cn | ru