de | cn | ru

Market News

Recovery room scams – the ugly spawn of binary options fraud

Aug 08 2017
By
Jonathan Smith

 It is no secret that more often than not the binary options brokers, particularly the unregulated ones, are a scam and exist with the sole purpose of defrauding thousands of unsuspecting clients out of millions.

 

Despite the attempts of authorities and regulators to curb their activities through warnings, legislation and outright bans, the scammers work around the limitations and continue their operations.

 

Somewhat logically, the binary options scams have spawned another industry – that of the recovery companies and professionals.

 

Now, the situation with the recovery companies is rather similar to that of the binary options companies. There are the honest ones and then there are the fraudsters. It is hard to distinguish them and clients should be extremely careful.

 

 The Warnings

 

Much like with the brokers, some regulators have warned the investors to be extra careful with the recovery rooms. Belgium's FSMA, for example, has published two warnings on the topic in 2015 and 2016.

 

According to the FSMA, usually the fraudsters cold call victims of investment fraud and offer to help them recover the sums invested, more often than not on unauthorized trading platforms. Usually they demand an upfront fee to help the victims and present themselves as under various pseudonyms and/or in different capacities (lawyers, financial analysts, accountants, financial advisors, etc.) “The services offered will then vary: an offer to help recover the sums invested, to restore the invested amounts on condition that a certain sum be paid or an account opened on a trading platform, etc. In any event, demanding that a financial payment be made before the service has been rendered is a clear indication of a “recovery room”. The fraud may be perpetrated either by the original fraudster or by other persons who have obtained a list of victims. In reality, any consumer who has been victim of an unauthorized trading platform or of investment fraud in general should be aware that fraudsters may try to target them again or sell their data”, the FSMA said.

 

The fraudsters can also pose as police officers, FBI, IRS, customs agents, representatives of government agencies or the prosecutor's office, or a financial markets and services provider regulator.

 

 

Below the FSMA provides some examples of recovery room scams:

 


Click on image to zoom.

 

 

From the examples given, it is obvious that there are two things the scammers are after: money and personal information. Money is obviously the priority, but personal information and credit card numbers are also sought after.

 

Back in 2010 the site Moneywise quotes the London police: "They will approach a victim of boiler room fraud and, for an upfront fee, promise to review their case and obtain reimbursement from a European Court fund or other legal avenue. Fees are often taken over the telephone by credit card payment or through PayPal, and it is thought that the recovery rooms purchase names of victims from the boiler rooms themselves."

 

The best way to protect oneself from such type of fraud is to avoid any services that require upfront payments. But then again, without wanting to insult anyone, if one was gullible enough to fall for the binary options scam, then perhaps s/he would be desperate and gullible enough to fall for the recovery room scam too. And this are exactly the premises the scammers work on.

 

But the upfront fee is by far not the only indication of fraud. Sometimes the scammers would offer to operate on a no-win, no-fee basis or will promise to refund the administrative fess if they fail to recover the lost funds. Needless to say, such refunds happen once in a blue moon.

 

The spam 

 

Cold calling is not the only means of attracting “customers” either. Like most sites with reviews of forex and binary options brokers and articles about scams and warnings, we also get our fair share of spam comments promoting such services.

 

They are craftily written and at first sight appear genuine. Here are a few examples:

 

“I used an unorthodox means to get my funds back, I'm open to discuss how privately. You can reach me via email at ******** at gmail.com, wrote my email that way to avoid spam.”

 

 

“get in contact with *********@financier.com now. if you want to have your binary options investment returned, had to post this ad, to steer anyone who has been in my past situation with these binary option brokers in the right direction. He just had my funds recovered, totaling 110k I lost last year to InnovateMarkets, contact him now! He is the bomb! tell him Steven Pritzker referred, he will answer quickly”

 

“I lost a lot of money to them. I had to hire a refund solution professional to get my investment back. Happy to help other traders going through this.feel free to reach out ********(at)gmail(dot)com”

 

We also got this:

 

“I have been scammed and scammed and scammed again. I invested with four binary companies and lost all of my investments totalling 290,000GBP. Then I was contacted by someone offering help – a company who specializes in binary recovery. I was scammed by them again. By the end of it all I had lost all of my savings and I was in serious debt. I was desperate for help and that made me vulnerable to recovery scams. My husband is not around anymore and I have an 8 year old son with learning difficulties. The pressure of being a single, working mother with a child who needs so much additional attention and support became overwhelming for me. I also felt too traumatized to trust anyone else and I was very afraid, but I had no choice other than to trust *******.com They have been incredibly helpful and supportive and also very understanding about all of my fear and concerns they helped recover all of my funds back within a week using unethical means I feel quite , tremendously joyous about the decision to use ********.com. I really hope that others do not have to go through what I did, and I wish that I had realized before things were so bad that I was being scammed. I hope my story might help others to not be fooled the way that I was.”

 

Our check revealed that this company actually offers hacking services. It claims to be “a collective of Social Engineers and Black-hat hackers with a wealth of experience in vulnerability assessment, client and server-side exploitation, password attacks and mobile hacking.”. Among other things, the company offers recovery of stolen funds from binary options brokers, password recovery, credit score repair, link removal, website hacking (including changing of school grades) and device tracking. There are the testimonials of clients who got their money back from fraudulent binary options brokers, guys who exposed their cheating wives and a guy who graduated thanks to the hacking of a school grade database. Payment, of course, is anonymous.

 

Another comment (under the same article about a binary options scam in the UK) said the following:

 

“My broker swindled every penny off me through binary options. Over $80k lost, starting from a $1300 investment. I was able to get my entire lost funds back. Thanks to ******* (dot) org. They are the best in recovery and other aspects too, just go through the website. There is still hope.”

 

We did indeed go through the website and found out that the company claims to be based in New Jersey and offers binary options retrieval, funds and asset recovery, credit score repair, password recovery, pen testing and private investigation. There is also the testimonial of a man who lost $122 000 to the Cyprus Securities and Exchange Commission (CySEC) binary options broker IQOption and the company helped him recover the funds. Why this man sought the services of company in question, instead of filing a claim with CySEC, remains a mystery to us.

 

We will never get tired of advising our readers to be extremely careful when investing their money and make tripe sure that the company is legitimate and properly authorized and regulated. This applies both to properly authorized forex and binary options like 24option and BDSwiss.

 

Them being authorized does not necessarily means that you will not lose your money, but at least you have a chance to recover something, if you become the victim of a fraud of the company goes bankrupt. If you're dealing with unauthorized companies, most likely you will be defrauded and then you could fall in the hands of the recovery scams.

 

Of course, we are not saying that all companies offering such services are a fraud. There certainly are legitimate ones who indeed do what they claim to do and recover funds, but one has to be as careful with them, as with the brokers.

 

 

TAGS: binary options  scam  recovery room  fraud 
Forex
Broker Country Regulation Platform Min Deposit Review
Cyprus, UK, Mauritius CySec, FCA, FSC MT4, MT5, Web $10 Review Website
Cyprus, SVG CySEC MT5, Web,
cTrader
$100 Review Website
Australia, Cyprus ASIC, CySEC 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 MT5 $5 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website
Australia, UK ASIC, FCA MT4, MT5,
cTrader
$200 Review Website
UK, Cyprus, Dubai FCA, CySEC, DFSA MT4, MT5, Web,
PrimeTrader
$100 Review Website

More Forex Market News

CFTC warns about 20 new forex and binary options scams

Dec 06 2019 17:46:44

The US Commodity Futures Trading Commission (CFTC) updated its warnings list with twenty new forex and binary options scam websites, bringing the total blacklisted websites to nearly 150. Read more

Thai authorities seize over 15 million baht from Forex-3D scammers

Dec 06 2019 10:38:02

  Officials from the Thai Department of Special Investigation (DSI) seized over 15 million baht from the owner of Forex- 3D Ponzi scheme and his associates, the Bangkok Post reported on Thursday. Read more

EU finance ministers agreed to block Libra

Dec 05 2019 13:46:59

EU finance ministers have agreed that  private digital currencies like Libra – the crypto coin Facebook plans to launch in 2020, should not be allowed in the European Union until all possible risks are identified and properly addressed, Reuters reports. Read more

CFTC looks for a binary options scammer who defrauded investors with $3,8 mln

Dec 03 2019 17:20:38

The United States Commodity Futures Trading Commission (CFTC) apparently can not locate Peter Szatmari, who defrauded nearly 4 million USD from binary options investors. Read more

Bulgarian court allows the extradition of Gal Barak to Austria

Dec 02 2019 17:51:14

After a successful operation of the police in Austria, Germany, the Czech Republic and Bulgaria has lead in February to the arrests of several financial executives, among which the Izraeli citizen Gal Barak, who is charged of orchestrating an online trading scam, that allegedly has defrauded Europea... Read more

Italy’s CONSOB blacklists EvolutionBrokers and KapitalSwiss

Dec 02 2019 15:30:33

   Italy's financial regulator Commissione Nazionale per le Societa e la Borsa (CONSOB) has blacklisted a bunch of unregulated brokers today, including EvolutionBrokers, and KapitalSwiss. CONSOB also ordered internet providers to block access to their websites. Read more

91 arrested in Indonesia over an online investment scam

Nov 29 2019 10:32:00

The Indonesian police has arrested 85 Chinese nationals and 6 Indonesians over an online scam that defrauded victims of over 36 billion Indonesian rupiah (2,56 million USD). Read more

Second person arrested in connection to OneCoin money laundering

Nov 28 2019 17:36:36

David R. Pike, a chief operating officer of Fenero Funds was arrested by the U.S. authorities in connection to laundering some 400 million USD, stolen through the notorious OneCoin Ponzi scheme.   Pike appears to have worked with the convicted OneCoin layer Mark S. Read more

UpBit hacked for $50 mln

Nov 27 2019 17:05:16

After a hacker attack South Korean crypto exchange UpBit has lost some 342 000 Ethereum (ETH) coins, equal to well over 49 million USD. The exchange has assured its clients that the loses will be covered by its own assets, but for the time being all withdraws have bees suspended. Read more

Charles Schwab buys TD Ameritrade for $26 bln

Nov 26 2019 18:01:43

Expected to be finalized in late 2020, the merger between two of the leading U.S. brokerage houses will create a mammoth company that will be in the position to challenge major financial rivals. Read more

de | cn | ru