We have seen an increase in the number of enquiries from clients relating to losses from binary option trading schemes.
A binary option, or fixed odds betting is a financial option where the payoff is either a fixed amount or nothing at all. An example would be to bet on whether a particular share price will be above or below a certain amount. Investors suggest they can gain high returns from small amounts but this often leaves clients losing large sums of money.
Figures from Action Fraud show the amount lost to binary options trading increased from £6,200 in 2012, to £27m in 2017. Binary options scamming has been described by the consumer group Which? as “Britain’s biggest investment con”. Evidence of bad practice across the board has been identified with high pressure sales tactics and unfair terms and conditions being used.
These schemes are increasingly being used by fraudsters using illegitimate companies to target vulnerable victims through cold-calling and pop up adverts. These companies are often registered in a foreign jurisdiction which makes them harder to trace and pursue. It is therefore very difficult to recover losses suffered unless there has been a UK based professional who facilitated the loss.
From January 2018, the Financial Conduct Authority will take over the regulation of binary options trading. Hopefully, this will increase the regulation of binary options companies and reduce the amount that has been lost by clients.
If you require any further information or any assistance, please contact the commercial team at Anthony Gold.