For many people, the rise of online trading has been beneficial. For others, it has left them vulnerable to people with bad intentions who were behaving unethically and illegally.
The number of scams and acts of fraud is substantial. There are ways to avoid unscrupulous brokers and people who claim to have an idea that cannot miss. For some, it is too late and they have already been victimized. Recognizing when this has taken place is important and binary options fraud is one ongoing problem.
Binary options and common complaints of fraud
A binary option generally boils down to making a profit or getting nothing. It is this type of idea that appeals to inexperienced investors because they are sold on the idea of high-yield profit and low-risk investments.
With binary options, the person pays for the option with the understanding that it is “yes or no.” That means that the person will get a certain percentage if the price goes beyond a specific level at the end of the option. If it does not reach that point, the investor gets nothing.
Websites are frequently subject to complaints about their behavior with binary options. The SEC and the Commodity Futures Trading Commission (CFTC) list three ways people are often victimized. They are:
- A failure to be reimbursed or get the credit they were supposed to receive
- Identity theft
- Software manipulation to create losing trades
Any one of these can lead to financial strife and massive losses. Identity theft creates a pathway to a whole new series of problems for a person.
With binary options fraud, there are ways to seek restitution
A common denominator with these kinds of investments is that the person who presents him or herself as a broker is extraordinarily aggressive and tries exceedingly hard to convince the prospective investor that it is safe with limited risk.
In truth, any investment will have a certain level of risk. Those that have lower levels of risk are generally not as profitable in the short amount of time that is a selling point with binary options that draw in victims. Still, those who have lost money and believe it is due to illegal behavior may have alternatives to pursue restitution.
Having advice from professionals who are experienced with recognizing securities fraud, broker misconduct and other types of financial crimes may be helpful.