One word which people most often connect with binary options trade is scams. Rigged bots, paid reviews, dishonest brokers, and any other auto trading services can give rise to scams in various forms.
This article tries to identify the prevalent dishonest techniques and known frauds in one place for you to be aware. It also identifies the various potential scams and dealing with a situation after you become a victim.
Table of Contents
Why Are Scams Stories Common?
Whenever any new investment scheme or an instrument emerges in the market, many businesses get involved. Under these circumstances, it is common to have a few service providers who will be less trustable than others.
You can observe such phenomena being more common in a binary options trade. The biggest reason for this is the popularity and easy accessibility of the methods for trading in the market. A crucial aspect to also note is that binary trades operated under the radar during their initial days. Therefore, the presence of unscrupulous players in the game is hardly surprising.
With the rise in better regulation by the government regulators of various countries, honest reviews, and a better online trader community, identifying scams is easy nowadays. It is effortless to spot an illegitimate broker post the restrictions are in place.
However, as is prevalent with any online marketplace, a few shady outliers still exist in the system. So what are the aspects that you should look into while pursuing such trades?
Nowadays, you can seek help from various professional companies that are available to recover money from binary options. These companies have a specialization in the recovery of money from fraudsters and aid binary fraud victims. They get access to chargebacks used to reclaim deposits by liaising with the credit card firms and banks. They will make a case for you and help you formulate a valid claim.
Binary Trades by Nature a Scam?
A ‘scam’ is a broad term that covers a wide range of misleading practices to lure someone to spend money by dishonest trading advice. Similarly, a broker may not be behavioral fraudulent but can undertake activities on their platform, which demean regular reimbursement of funds. You ought to avoid such a broker.
In these cases, the issue is not with the binary options trade as a concept but is with the broker. Therefore, it is of paramount importance to research before you enter any particular platform.
As a precautionary measure, you can treat every user review with skepticism and not take a call based on the same. Genuine reviews are helpful, but testimonials showcased on a broker’s website may not be completely unbiased.
Trader forums can also be an area of concern. It may happen that during your quest to know more, you may find such forums to be an extended arm of a particular broker’s website. One of the best ways to ‘scam check’ a broker is to opt for independent, comparative, and thorough reviews.
You should focus on the website that encourages and allows actual users to contact and report their issues with specific brokers. This way, you can have more confidence that the content you refer to is genuine and up to date.
Regulation
The regulation techniques for binary options trading vary in different countries. FCA or Financial Conduct Authority of the UK does not put checks to regulate the binary options trade directly. However, they publish a list of unauthorized entities.
While such a regulatory authority does not demark the entities as scammers, they recommend investors avoid them. The complete list can be available on the FCA site.
The other nations like the USA and the European Union treat binary trade options as a vital financial product. Depending on the origin of the platform, they are subject to regulatory oversight regularly. You may check CySec in Cyprus and CFTC in the US.
Investors looking to avoid any scams can refer to the status of a platform on such regulatory sites. The trust indicators score is a critical aspect that can help curb the number of people getting robbed of their money. The regulatory status indicates the broker’s adherence to certain standards when transparency and service are in consideration.
It is also crucial to consider that the above steps are only a starting point for you to be careful about your future trades. It does not serve as an exhaustive list to guide you in the binary options trade market.