Overview of binary options
Not all binary options brokers are created equal. There are regulated brokers, unregulated brokers, and scam brokers. Let’s compare the regulated and unregulated brokers first.
Regulated brokers, or the legit brokers, are the ones who have licenses to operate. They follow strict laws depending on their regulator and they’re only allowed to operate in certain countries. Your money will definitely be protected and if the regulated broker disobeys any rule, they’re punished by the regulator.
Unregulated brokers, on the other hand, are completely the opposite. They are not under any regulating bodies. You may think that no one will want to do business with them because of that, but you’re wrong. Some traders choose to do business with unregulated brokers. That’s mainly because you can trade anywhere in the world with unregulated brokers.
Regulated brokers are limited to certain countries. Unregulated brokers also spend less money compared to regulated brokers because licenses can cost a lot. That means more money for clients of unregulated brokers. But since they’re not regulated, your money will not have as much protection as regulated brokers offer. You are also at risk of facing legal implications.
Now for the last type which is the scam brokers. There’s no point in discussing the good in scam brokers because they don’t have any. Scam brokers are there for the sole purpose of stealing your money.
LIST OF SCAM BROKERS
Who is the victim of scam brokers
There are people who are more likely to be lured by scam brokers than others. It doesn’t matter what generation you are from or how high your level of education is, you can still be an easy mark for scam brokers. The main victims of such things are people who believe that getting big amounts of money by doing practically nothing is possible.
Scam brokers are more likely to succeed if you don’t read every single thing before you sign up to their platform. You’ll be a victim as well if you don’t dig deep enough and check everything out about the broker. Not knowing anything about Binary Options trading will make you an easier target for scam brokers too.
The moment you invest on Binary Options trading, you open yourself up to the possibility of losing your money. So no, you are not necessarily a victim of a scam broker the moment you lose money. There are also instances where legit brokers will ask you for additional documents in order to do transactions so don’t stress yourself about that either.
How do scam brokers steal traders’ money
No one is a hundred percent safe from scams, especially when big amounts of money is at stake. Scams are only effective when the people behind it are creative. That is why scam brokers have different ways of stealing an investor’s money. Here are a few things that scam brokers do to steal the money of traders.
Giving out wrong information about Binary Options trading
This is what most scam brokers do to steal an investor’s money. They tell people that it is very easy to earn money in Binary Options. Scam brokers usually tell their clients that the risks in Binary Options trading are not that much.
Those who are not that knowledgeable when it comes to Binary Options trading will definitely be attracted by the proposition. Imagine being presented all of the good things about something and not being informed about the bad side, anyone will be drawn to that thing. In other words, this is fraud and clients get scammed even before they put their money on it.
Cold-calling potential clients
If you a phone, either mobile or not, chances are you have received your own share of spam texts and calls. Scam brokers can also go that route to commit the fraud instead of executing the fraud over a platform. Some scam brokers even send out emails, which is what is referred to as cold calling.
They will contact you relentlessly and try to manipulate you into making a deposit. If you are wondering how scam brokers get personal information, they do it illegally as well. They buy information that has been stolen.
Creating confusion on their Terms and Conditions
Scam brokers can steal your money by being vague or even leaving out details on their Terms and Conditions. And we do have to admit that there are times where we skip reading the Terms and Conditions especially if it’s very long. But you have to keep in mind that when you create an account for Binary Options trading, your money is at stake.
It’s not like creating an account on social media networks. You have to read everything and if you encounter come parts that are not clear enough, you have to ask for clarifications before entrusting anyone with your money.
The broker, or anyone employed by the broker, offers to manage your account
Never let anyone, especially someone you do not know personally, get a hold of your account. The worst thing about this ploy is that at first, the scam broker will score winning trades at the start to gain your trust. Because you already trust them, the next logical step is to deposit more money. Of course, that is when they will start to slowly drain your funds.
Withdrawing funds is downright impossible
Some scam brokers don’t take the money of traders until the last possible second. That is, they will not let the traders withdraw their money. Sometimes, the scam broker will not give you any answer when you try to withdraw. They will stop taking your calls and not answer your emails.
Others will give vague answers to traders that will lead to more confusion. There are scam brokers that will encourage traders to add more funds and to delay their withdrawals. Some scam brokers even send traders emails that say they are suspected of fraudulent activities and the broker will have to freeze their accounts.
How to distinguish these scam brokers
It is quite easy to fall for scam brokers. But that should never deter you from going into Binary Options trading. In fact, there are ways to determine whether the Binary Options broker is just a scam. Just look for the following signs and you will be more or less safe from scam brokers.
Some scam brokers open websites that may look like a real binary options broker. The logos have similarities and even the name are almost the same. When you look on their website, there’s not “About Us” section. There are times when there’s a link but if you click on it, it will not lead you anywhere.
Scam broker create a trading signals software that promises 100% accuracy or even 100% guarantee. If you happen to see those things, rest assured it’s a scam. They usually have headlines like “Make $1000 In 30 Minutes”, “How to earn $10,000 Daily Profit” and the many variations of such things. The message is the same, making exorbitant money in an impossible short amount of time.
They have a section on their website with multiple testimonials about their trading system. All of the testimonials are glowing. They’re fake and in fact, some regulating bodies prohibit testimonials.
One thing you’ll encounter on the websites of scam brokers is a video advertisement where an actor appears with very expensive things. The actor will then proceed to tell a story about how he or she became a millionaire in just a short amount of time. Sometimes, instead of a video, they have an audio of the same nature.
Upon joining the scam broker, you will immediately lose your initial deposit that is usually around $250. Soon after that you will then get a phone call from a “senior broker” asking you to invest more money, typically up to $5000. Another thing about scam brokers is that they are so insistent on the fact that they are not scam brokers to the point that they will repeat it again and again.