The COVID-19 pandemic has been around for a year and a half, and it has been wreaking havoc in everyone’s life, from health to financial conditions. Thanks to the lockdown in many places, the economy has slowed down, resulting in laying off personnel by corporations and companies.
There’s a new variant of the pandemic that’s targeting these unemployed or work-from-home employees, and no, we are not talking about a biological mutant of the novel coronavirus. This new variant is called Binary Options Scams, and they are targeting those who are vulnerable.
Unregistered brokers selling binary options are targeting people on social media and internet messaging apps. It’s wise to know all about the modus operandi of such scammers at times like this.
Scammers Are Targeting Unemployed or Work-From-Home Workers
According to the Commodity Futures Trading Commission, the number of fraud complaints has increased significantly over the last few months. A large chunk of these complaints is from those who lost their jobs or have taken up full-time work-from-home roles due to the pandemic.
People who have been affected by the pandemic are easy prey because they are either looking for ways to make money or are trying to secure their future. Scammers are cashing in on the vulnerability and insecurity of affected individuals to lure them into binary options scam by promising high returns.
In case you are already a victim of one such fraud, don’t lose hope. There are methods to recover your lost money, including card chargeback, filing a complaint with a regulatory body, or hiring a binary options recovery expert. A binary options recovery expert company will confront the scammer by performing preliminary checks and gathering evidence to get the lost money back.
In case you have not yet come across such scammers, it’ll help to know how they operate and what to consider before investing.
How to Spot Binary Options Scams
Most fraud scammers operate online through social media or instant messaging apps. They usually prey upon victims using influencers and through a member of an IM group. Usually, such influencers or members will recommend a certain broker and post phony proofs like screenshots of payouts to prove they made money on the trade.
Usually, these screenshots and images have fake names and amount to fool victims. The scammer’s goal is to tempt potential traders and get them to pay an upfront deposit, sky-high commissions, taxes, and trading fees.
In most cases, victims are sent notifications about how their money is growing. However, when the investor tries to withdraw their profit, they’re asked to pay commission, tax, money transfer fees, and more before making the withdrawal.
Once the customers get suspicious and refuse to pay further, the broker either cuts off all communication or simply ghosts them. Below are some red flags when it comes to trading scams.
- Broker doesn’t reveal their location or identity
- The entire communication happens online
- Unrealistic returns in a very short amount of time
- Unlicensed and unregistered brokers
- Based outside the country you reside in
If you find anyone conducting shady trading deals or know someone who has been a victim, you can tip/complain at the CFTC complaint portal.
What to Consider Before Making an Investment in Binary Options
There are a few things to keep in mind to stay safe from scams for those who are still willing to take a chance on Binary options after knowing the risks. First and foremost, never invest more than you can afford to lose. In simpler terms, don’t mortgage your home, car, or other important assets to invest in binary options. Always stick to a smaller amount to first test the water.
Secondly, always ask the broker whether they are registered with CFTC and check their registration information on the CFTC website. If you are taken to a trading company, make sure that the company is registered as well. While having a registration is not a guarantee, it indicates that the entity has undergone background checks and meets the trading regulations.
Furthermore, arm yourself with ample knowledge about trading. Before making any trade, research and understand completely how the market operates and the nuances of the product you plan to trade. Also, find out about standard fees, commissions, taxes, and other risks involved in that particular trade. This knowledge will help you spot a scam when you see one.