Binary Options Scams Targeting Unemployed Individuals in the UK

During the COVID-19 pandemic, people suffer due to changing financial conditions as many companies are laying off employees. Binary options scams target vulnerable unemployed people who buy such options through unregistered brokers who sell them on social media platforms or through internet messaging apps.  

In the UK, binary options are banned for retail customers, and if anyone offers any such scheme, it is probably a scam. In July 2021 – Google announced it was tightening the policies related to Financial Services advertising to fight financial fraud in the UK. 

Google will ask the advertisers to go through verification to post their ads on the search engine. The advertisers must demonstrate their legal status as part of the verification process.  

Binary options allow buyers to speculate on the underlying asset's price movement. Scammers earn through the insecurity and vulnerability of the individuals lured into such deals in exchange for fake promises of high returns. 

The investors are targeted through a social media influencer or a member who claims to be a broker. At the same time, they may use phoney proofs or screenshots to claim they give huge payouts to the customers; all such screenshots or images have fake origins – mainly created to target the victims. 

The UK has completely banned binary trading from 2 April 2019. It follows the ESMA temporary ban on selling such options to retail buyers across the EU (including the UK since 2 July 2018). 

The FCA declared that crypto platform Binance and its UK subsidiary could not conduct business in the UK, and they must make it clear that such business is unregulated. FCA banned derivatives binary options as unscrupulous operators offered mainly to cheat retail investors. The trade continues at offshore platforms, and the same applies to Binance. 

How do Binary Options work?

• The firms offering scam schemes on Binary options sell such options on social media platforms, where they send links through fake websites to the buyers.

• The firms that operate such scams are often based outside the UK, but they have a UK presence and may own a prestigious address in the City of London. 

• They distort prices and payouts through such options and sometimes close trading without notifying it beforehand, refusing to pay back the earned money. 

How To Protect From Binary Trade Scams?

• One should not be lured into buying such options online on social media platforms by looking at the high returns and easy investment tactics.

• One should always invest through a reputed, authorised financial organisation. Further, the sale of binary options to retail buyers is banned, so anyone offering it is probably into unauthorised business. 

• Always see if the registration and warning list on the investment website supports the buyers during the conflict. 

• Check if the firm is not a clone by looking into the reference number (FRN) and other relevant details. 

• It would be sensible if you also were careful of the scam and should not be lured to buy where they promise to get your money back or offer a buy-back scheme for a fee.

• If you are contacted out of the blue and feel you have invested in a scam, contact the Financial Conduct Authority (FCA) or Action Fraud.