What are Binary Options?
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.
In September 2017 the Canadian Securities Administrators participating jurisdictions banned the offering, selling or otherwise trading of Binary Options shorter than 30 days to individuals. For more information on the ban, visit the website of your local securities regulator.
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 fact should be a clear warning 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.
NEVER
- 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
ALWAYS
- 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 investment fraud to 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.
Revictimization
You can be a victim of fraud more than once
Once you’ve been the target of a scam, you may be targeted again. In fact, 25%2 of fraud victims are defrauded a second time. This is known as ‘revictimization,’ or a ‘recovery room’ scam. Here’s how it often works:
- 1The person who scammed you keeps your contact/personal information, or sells it to someone else.
- 2After some time has passed, you’re contacted again—either by the first scam artist or by a new one.
- 3The caller explains that they can help recover some or all of your lost money, but you’ll need to pay a “transaction fee,” “administration fee,” or “tax” first. This is usually a significant percentage of the amount you originally invested.
- 4When you pay this fee or tax, they will cut off contact and you won’t get your money back. Don’t send money— report the scam to your local securities regulator.
2 Canadian Securities Administrators. October 2007. 2007 CSA Investor Study: Understanding the Social Impact of Investment Fraud.
WARNING:
NO ONE may offer or sell BINARY OPTIONS to an individual in CANADA.
Protect Yourself
Check Registration
Need to check if an individual or
financial firm is registered?
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How to Report Fraud
It’s important to report even the suspicion of fraud, or to call if you have questions about a financial offer you have received.
In the Media
Binary options are an important matter and being reported by several news agencies.
Here are just a few of them.
Binary option trading companies have cost Sask. people $490,000US
June 9, 2017
The Financial and Consumer Affairs Authority of Saskatchewan (FCAA) has issued cease trade orders against two foreign companies.
Read More >
Canadians taken for a ride with online trading
July 18, 2017
Would you put money into a slot machine or gamble at the blackjack table if the house never paid out?
Read More >
How thousands of Britons are at risk from ‘world’s biggest online scam’
July 28, 2016
Exclusive: Lawyers tell The Independent victims are losing up to £1m each in investment fraud
Read More >
Rural Manitoba couple loses $180K to binary options fraud
July 30, 2017
Celebrity's picture used, without permission, to lure investors in
Read More >