What are Binary Options?
Even on the surface, binary options are a
very risky bet.
It’s an all-or-nothing proposition in which you bet on the performance of an underlying asset – a currency or a stock, for example. The deal promises quick money: you are supposed to receive a predetermined payout, sometimes within minutes or even seconds. Or you lose your money altogether. But in many instances, no actual trading takes place – the pitch is just a con to steal your money.
How They Work
Binary options scams typically use social media, online ads, chats, unsolicited texts, and cold calls.
They place ads online, typically directing you to a well-designed website that seems legitimate. Or, genuine-sounding automated robo-calls prompt you to stay on the line to speak to a “trader.” Scammers work from scripts to sound friendly and professional, but they are trained in high-pressure sales tactics.
The experienced “trader” will bait you with free or bonus money to open an account. Then they ask for your own money via credit card, pre-loaded card, or money transfer – with promises of easy, impressive returns. In reality, it’s often all fabricated, with a small initial success meant to build trust, but nothing may actually be traded.
Once you try to withdraw money from or close your account, or if fraudsters believe you’re catching on, the “trader” will ignore your phone calls and emails. In fact, they may use your credit or personal information to access even more funds without your knowledge. After they steal as much of your money as they can, they disappear.
No individuals or firms are registered to sell binary options in Canada.
This should be a clear sign to stay away from them. The majority of binary options operations are based in out-of-reach places overseas with few or no financial regulations. It’s common for firms offering fraudulent binary options to hide from authorities, regulators, and their victims with a variety of aliases and misdirection techniques.
The fact is, you never know who you are dealing with. These criminals are aggressively targeting Canadians and others around the world, swindling them out of billions of dollars. Victims have been defrauded of their life savings, RRSPs, and money set aside for post-secondary education.
- send money to anyone you know only from an unsolicited call, email, or advertisement
- allow yourself to be rushed or pressured into making a decision
- give out sensitive personal information online or over the phone. For example, passport, banking, drivers license or utility bill information
- send money offshore to an unregistered firm
- research an investment before making a commitment
- make sure the firm and/or individual you’re dealing with is registered here
- check statements (e.g., bank, credit card) regularly to make sure there are no unauthorized purchases, or charges from vendors you do not know
- be wary of those promising high returns on low-risk investments
- report fraud to police or your local securities regulator
- get a second opinion from a registered financial adviser, lawyer, or accountant
Binary Fraud Victims
If you become a victim of binary options fraud, here are some steps you can take:
- 1Cancel your credit cards and debit cards.
- 2Contact your provincial securities regulator.
- 3If you have provided the binary options firm with your banking information, contact your bank to advise it of this.
- 4If you have provided the scammers with passport information, driver’s licence, or utility bill information, contact the appropriate issuer(s) to advise them of this.
- 5Tell a close friend or family member of your involvement. Keeping the fact that you have been victimized a secret, only adds more stress to a difficult situation.