Investors of certain markets have had a hard time this year due to the COVID 19 pandemic. This year global economies have experienced a heavy recession. And if that is not bad enough, investment scammers are still stealing from innocent people. Trading and investment scams evolve every day. Nowadays they have become so sleek, you don’t know you have been robbed until it is too late. Fund recovery after such scams is a hard and long process, but it can be done.
Trade and investment scams are cleverly orchestrated schemes to rob innocent people. They convince people to part with their money with fake promises of high returns. They prey on people who want to get returns on investments fast.
Nowadays they impersonate genuine investment traders and convince people to invest. They may even make one payment to trap you into investing more money, only for you to suffer devastating losses.
Some of the Notorious Investment Scams
The common characteristic of investment scams is that they promise low-risk investments with high returns. They come in different languages but the premise is the same. For instance, an advance fee scheme persuades you to give a small amount for triple returns. You may feel that you are giving just a small amount, but if they trick millions of people, they make a lot of money. They come up with “boiler room” offices to convince you that they are professionals. Once you lose your money, you cannot trace them.
Some scammers pitch “exempt securities” and sell you on a fake exclusivity narrative. They convince you of how lucky you are to be the first one to know of these securities. Later you realize that you paid for non-existent securities.
Forex scams are also on the rise. Some forex trading is legal. But scammers have come up with clever ways to mint money out of innocent traders. They convince you to open ghost accounts with promises of big returns. Once you make your deposits that is the end of the road for you.
Other scams include offshore investment, pension scams, and Ponzi scams. You send your money or offshore investments in the name of lowering your taxes and you lose it all. Ponzi scams promise quick cash in a short time. You may also fall victim to pump and dump schemes that lead you to buy worthless stocks.
How Can You Spot a Scam?
You have to be very careful about money nowadays. Trade and investment scammers come up with clever ways to deceive victims every day. Some of these scams look legit and before you know it, millions of people lose their money. However, here are the obvious signs that you can look out for in these scams.
- They offer very high returns with very low risks.
- They promise you hot insider secrets and information
- They give you pressure to make decisions instantly. They convince you that you are running out of time.
- The sellers are not legally registered to trade stocks or investments. Some of them can convince you with fake documentation. Always do your background research.
- They keep sending you spam messages on social media and your email address.
- Pension schemes target senior citizens and coerce them to disclose personal information about their pension plans.
- They are relentless with unsolicited advice. They barely let you breathe. A genuine company lets you breathe and make a sound decision.
Why Do People Fall Victim to These Scammers?
Surprisingly, more people fall into these scams every year. There are many reasons why someone may fall victim to these scams. Some of them are very crafty in the way they market themselves. They forge legitimate documents and convince people that they are legit. They use very inviting language and narratives to attract the masses. They use false advertisements and stories to convince you that others have had successful investment returns. They offer the lowest risk and the highest returns.
The rate of unemployment and poverty is on the rise. Simple psychological manipulation can cause a person to fall victim to these scams. They promise quick riches to people who are struggling and they believe them. They ask for something small at first, so people oblige.
Can People Recover Their Money From a Scammer?
Investment fraud causes disorientation, stress, and worse, financial distress. Funds recovery is a long and hard process, but it can be a success. Victims should report the scammers to anti-fraud government authorities. You can also contact your bank immediately to reverse transactions. If it’s not too late you can get your money back. Collect as much evidence as possible and file a funds recovery police case.
If you can get a hold of the scammers, you can file a class act as a group and go to court. If you are not a part of a group scam, get an investment lawyer, and file a single case. You can also use a fund recovery company that specializes in asset recovery. They conduct a detailed investigation with legal help and they often recover money lost to scammers.
Binary options continue to be a highly-debated subject among retail traders and even though some might argue that some brokers focusing on these assets have a long track-record in providing reliable services, in reality, the whole binary options industry favors the appearance of scammers.
Letting aside the fact that trading these instruments comes with a high risk of loss, there are plenty of other reasons that this is a “heaven for scammers” and in this article we will like to have more focus on the matter.
Binary options favor the “house”
If we think about how binary options work, the trader is always on the weaker side. Most of the binary options brokers offer around 80% payout rate and that has many implications on the probability to generate returns in the long run.
To be more specific, let’s say to buy a binary option with $10 and assume the price will be above the strike price at the expiration (call option). If you are right, then you will make $8 in profit. However, if you are wrong, you will lose all $10, which puts you in a position to have a high win rate over any given period, to be a profitable trader.
If we combine this disadvantage with the ability to manipulate prices on the platform (this will be discussed in one of the following sections), traders are faced with guaranteed losses, rather than profits, when dealing with a binary options scam broker. A lot has changed in terms of regulation for these companies and because of that, now we have most of them operating offshore.
Binary options brokers generally operate offshore
Since 2018, European regulators made a historic decision to reshape the regulation for retail online trading. As a result, there are tighter restrictions for traders with little experience and at the same time, binary options are prohibited for retail traders. This had been a major hit for brokers, which are now operating offshore.
This creates an even bigger problem, considering they can now operate free from any regulatory requirements, and even target customers based in areas where binary options trading is no longer allowed. As with any other broker type, operating via an offshore entity should be a major warning flag, signaling a binary options scam or a Bitcoin fraud.
There’s a long list of scams related to binary options, and more than 90% of them were operating via offshore companies. As a result, traders that still want to trade these instruments, despite acknowledging the high risk associated, should avoid these entities and instead look for brands that have a long track record in providing reliable services.
Marketing exaggerated returns
Like most of the fraudulent companies, a binary options scam will use aggressive social media advertising to reach inexperienced people and promise exaggerated returns. This is a typical practice and works many times because financial strains are pushing some to take drastic measures and embark on avenues that could generate returns fast.
Unfortunately, a binary options broker can’t ensure or talk about the level of profitability you’ll be having. That will be depending on the market’s performance, your expertise in the world of trading, as well as the effectiveness of your trading strategy. The broker is a simple intermediary that creates a link between you and the market via trading software.
When dealing with a binary options broker promising you will make a lot of money, the best thing to do is walk away as fast as possible. It can be a company operating not on behalf of customers, but one that wants to set up a trading or bitcoin scam.
Accurate pricing on the binary options platforms?
Another important aspect to consider has to do with how the prices displayed on the platform are calculated. A binary options scam can be easily spotted by simply reading its terms & conditions. These companies are using a method that implies averaging the pricing from multiple liquidity providers. As a result, the prices you see on the platform are not the actual market valuations, but averages calculated by the broker.
Considering binary options trading is generally short-term and even a pip can make the difference between profit and loss, it would be important to have the most accurate pricing.A bitcoin scam hide behind this price adjustment technique that generally results in massive losses for clients in the long run.
Many binary options brokers turned out to be scams
After taking an in-depth look online, we’ve noticed that there are plenty of blacklists with binary options scam. Only a few companies are still labeled as not scam, which means that most were eventually flagged as “not to be trusted”. For someone looking now for a binary options broker, this fact should be raising doubts, even on those companies that are still out there providing their services.
Keep in mind that most binary options brokers have affiliated programs and some positive online reviews may be coming from individuals that are affiliates and are generating income based on each new customer they bring in. As a result, even reviews should be taken with a grain of salt. The ultimate goal should be to avoid being trapped in a binary options scam and any Bitcoin fraud. By considering all the relevant data we’ve highlighted today, we think that’s possible.
We can conclude that binary options trading comes with high risks and the whole industry is designed in such a way that scammers can thrive. If you want to trade these instruments, despite all the downsides, it would be important to do in-depth research and find out a company that has been operating for a long time and gets reliable positive feedback from customers. So many binary options scams had been uncovered during the past few years and this should raise serious questions about the interests of these brands. Finding the best binary options broker is a very complex process and will require you to not make any concessions.
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