What to Do When You’ve Been Scammed by Your Binary Options Broker

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What to Do When You’ve Been Scammed by Your Binary Options Broker

With binary options trading becoming increasingly popular and easily accessible, there are a number of online brokers popping up everywhere. Unfortunately, this means that among all of the brokers, there will be some out there who are just in it to make a few bucks quickly and get out.

For this reason, it is vital that you do research on each binary broker before signing up with them or depositing any money, because you simply never know if it is a legitimate business or not.

It is also important to note that binary options itself does involve risk, depending on the assets that you are trading against, the expiry times you are working with, and the amount you are trading. The binary options broker you are using is in no way responsible for the changes that occur in the market, even if they offer predictions meant to help you make decisions. In the end, you are responsible for the trades that you make.

Problems with withdrawing funds

What happens most often in binary brokers that were set up with the intention of scamming you is that when it comes time to withdraw your money, you are not able to do so for whatever reason. Before you go any further with your complaint against a broker that won’t allow you to withdraw your money, be sure to check their guidelines. There may be a minimum balance requirement, a minimum length of time enrolled in their program, or other stipulations that could be preventing you from withdrawing your money at that point.

Contacting customer service

If you have read over all of the withdraw requirements and you are sure that you meet them all, then it is time to begin the process of filing a complaint in order to get your money out of the broker’s hands. The first step is always to contact the customer service for the specific site that you are working with. Give as many details as possible, explaining the events leading up to your withdraw request and what you have done to try to solve the problem yourself. Be sure to be polite and clearly state that you want to work with them to figure the situation out.

Filing an official complaint

If the customer service agent is unable or unwilling to help you, or you do not hear back from them within 2 – 3 business days, there are a couple things that you can do, depending on whether the broker you are working with is regulated or unregulated. With a regulated broker, you can express to the customer service agent that you will be filing an official complaint with their regulating body if they are not willing to solve your problem. Most of the time, the possibility of falling into bad terms with their regulating body is enough to encourage the broker to release your funds to you.

Unfortunately, if you are with an unregulated broker, then there is not much else you can do as far as moving up a chain of command. You can, however, clearly state your demands that you would like to receive the money that you earned and if nothing is done in a certain time period, you will speak out against them. Even unregulated brokers have a strong desire to protect their name and will not risk negative publicity within the financial industry.

If you are working with an unregulated broker whose intention was to scam you from the get-go, it is possible that you will struggle to get your money back. Smart scammers will take your money and run, and tracking them through the internet is nearly impossible. The only thing you can do in this case is spread the word about the scam as much as possible to help others avoid being scammed and to hope that somebody is able to come forward with information about the scammer.

Finding information on regulated brokers

To file a complaint with the regulation body of a regulated broker, you will need the official name of the broker as well as their license number. Since most regulated brokers use their regulation status as a way to encourage people to sign up with them, they nearly always have their information displayed prominently on their website. If you cannot find the information on the broker website, you may need to check with the government agency.

The government agency that regulates the binary options broker that you are working with will vary depending on the country in which the broker is registered. For companies that are in the United States, check with the U.S. Commodity Future Trading Commission. With companies originating from the United Kingdom, you can check with the Financial Conduct Authority.

Contact details to regulating bodies worldwide

Below you’ll find contact details to regulating bodies that can help you sort out any issues you might have with your broker. It’s important to contact the authority for your broker’s specific region.

New Zealand’s Financial Service Providers Register (FSPR)
National number – 0508 377 746
International number – +64 3 962 6162

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Markets in Financial Instruments Directive MiFID
EU number – 0800 6789 1011
Outside of the EU – 0032 2299 9696

(CySEC) Cyprus Securities & Exchange Commission
International number: +357 22506600
General email: [email protected]

Bulgaria Investment Intermediary with the Financial Securities Commission FSC
Call center: 0035 9294 04999
General e-mail: [email protected]

Malta Financial Services Authority
National number: 800 74924 (Freephone)
International number: 0035 6254 85700
General e-mail: [email protected]

(FCA UK) Financial Conduct Authority
National number: 0800 111 6768 (freephone) / 0300 500 8082
International number: +44 207 066 1000

(ASIC) Australian Securities & Investment Commission
National number: 1300 300630
International number: 0061 3517 73988

British Virgin Islands Financial Services Commission
National number: 0284 494 1324 / 0284 494 4190

International Financial Services Commission Belize
National number: 0501 822 2974

(SIBA) Seychelles International Business Authority
National/international number: 0024 8438 0800 / 0024 8438 0888

Additional notes on regulated vs. unregulated brokers

Experts nearly always advise that you choose to work with a regulated broker because of the additional rules and regulations that are placed on them. This makes them much safer to work with and will help you get what you deserve if it becomes necessary. Regulated brokers are also held to certain standards and many are required to provide you with certain information that will help you make better trading decisions. While there are a few unregulated brokers out there that run reputable businesses, in general, it’s best to stick with those who are regulated, no matter what types of perks are being offered.

The main benefit of choosing a regulated broker when it comes to money being withheld from you is that you have the ability to go to the regulator with your case, who in turn has the ability to approach the broker on your behalf. At that point, if the broker is found to be in the wrong, they will not only be forced to make things right with you, but they may also be subject to various fines and sanctions. Brokers who repeatedly break the rules will have their license removed which removes much of their credibility as well.

Have you been scammed by your broker?

Unfortunately there are still many binary option brokers who overcharge their clients with hidden fees or unauthorised credit card transactions.

Have you been overcharged by your broker? Do you feel that your broker has committed a fraud and scammed you out of your money?

If so, this page will inform you about your options and how to get your money back. In some circumstances, if transactions were unauthorized, it is entirely possible to recover your funds.

STEP 1. Try to resolve the issue with your broker first

(If you have already tried reasoning with your broker skip to STEP 2 or STEP 4 below.) If you believe you have been scammed by your binary broker always try to resolve this issue with them first. You can call them to discuss your case but it is much better to communicate with them via email or a chat window so that you will have the whole history of the conversation and the outcome.

Be warned that most customer relations employees hired by a broker will try to convince you of trading more to recover your losses. They might entice you with new offers reserved just for this type of occasion. Ultimately, if your goal is to get your money back do not accept any offers and save all your conversations with broker’s representatives.

When your binary broker refuses to issue a refund and you proceed to STEP 2 and approach your credit card company and open a chargeback case, you will be able to add all that conversation history to your case and prove that you had already tried to resolve this issue with your broker unsuccessfully. This will be a big step forward.

In your written communication with the broker pay attention to the following:

  • any false promises made,
  • real broker location vs one that is advertised,
  • how and where payments are processed (see your bank statements for details)
  • legal and rightful owners of the company.

When you add this information to your credit company in support of your case, make sure to organize everything really well, preferably in chronological order and in a single PDF file. If your submitted information is well organized your claim will be processed quicker.

STEP 2. Contact your credit company. Use chargebacks.

(If you have already tried your credit card company and were unsuccessful skip to Step 3.) Claiming the funds from your credit card company should be the second step in trying to get your money back. Some ex-employees have revealed that even the threat of a chargeback might be enough to scare the broker into returning unauthorised credit card transaction.

The main reason binary brokers are so afraid of chargebacks is that like any other business they have certain limitations set by their payment processing company and can’t go above a certain percentage of bad transactions or chargebacks.

As you can imagine any imposed blocks, delays, or additional charges by the payment processing companies can be very time-consuming and costly for the broker. Sometimes it’s just easier to return the funds back to the user.

How to open a chargeback case

To begin the process of claiming your money back with the help of your credit company you will need to contact a representative and fill out a form for chargebacks. You will be asked to state the reason for a chargeback. Depending on your situation the best options to consider would be:

  • fraud, misrepresentation, or breach of contract.

During this whole process you may be asked for additional information. Simply be patient and try to provide everything they ask or need to resolve the matter.

STEP 3. Contact the financial authority overseeing your binary broker

(If you have already tried these three steps and still could not recover your funds consider Step 4.) Binary brokers are quite wary of regulators and financial authorities which oversee their operational and financial conduct. Therefore any serious and well founded claims made to such authorities can result in a formal investigation.

There have been cases in the past where users got all of their money back from their broker as soon as the regulators launched their investigation. Of course this often takes much longer than expected as regulators only rush in with a formal investigation when there are multiple claims of committed fraud.

The issue with financial authorities that you may encounter is their limited jurisdiction to a specific region or country. They are more willing to help if the claimant is a citizen or at least a resident of the country or region (i.e. EU) in which they have authority and the broker is also registered to operate in their specified region. See a list of financial regulators here.

Use a specialist company to recover your funds

Simply put if you don’t have the time or the experience to file a claim and pursue the entire case against your binary broker yourself, try outsourcing it to a lawyer or a specialist company who will use their knowledge of the law and its processes to recover your money.

My Charge Back

A company with a good level of success in recovering funds from binary brokers is Mychargeback.

They have specialists who deal exclusively with fraudulent transactions made by binary brokers. Based on experience they know how to proceed with a claim and what is most effective approach.

By hiring a specialised firm who will act on your behalf and in your interests will be the first warning sign to your broker that you are serious about getting your funds back.

Hiring a lawyer will be a lot more expensive and expect to be charged be hour and without any refunds.

Not much to lose thanks to a Money Back Guarantee

You only need to pay a fee of $72 to open your case. However, if your claim is rejected by the bank, your payment will be refunded in full, making this one of the most affordable representations you can use.

Please note that if you decide to open a chargeback case with your credit bank by yourself as described in Step 2 and you lose your case, the decision will be final and you will not be able to reopen the same case again. Using Chargeback in the first instance will increase your chances of recovering your funds.

Conclusion

The truth is that it’s not that easy to recover unauthorized charges by your binary broker. Many have tried and failed for various reasons. The claiming process can be a very daunting task and many users get discouraged too quickly. Those that persevere and keep pressure on their broker, credit card company, their bank, and financial authority will have a greater chance of success in getting their money back.

References and further reading:

What to Do If You’ve Been a Victim of Scams or Fraud

What are your chances of getting restitution? Here’s what you need to know.

There are two fronts in the battle against scams and fraud: prevention and restitution. On the prevention side, there’s plenty going on and lots of money being spent. The fiscal year 2020 federal government budget has earmarked roughly $15 billion for cybersecurity across more than 70 agencies. And that doesn’t include money to be spent on classified projects.

The bulk of the money is used to prevent crimes such as leaks of military secrets or National Security Agency (NSA) breaches. But it also helps ward off ransomware attacks and other types of fraud that could potentially affect millions of Americans by compromising their personal health or tax records. (Last May’s WannaCry ransomware attack, which was reported to have been enabled by a tool acquired in an NSA breach a month earlier, disabled more than 200,000 systems in 150 countries.)

Private companies, including huge tech firms such as Apple and Microsoft, also devote massive resources to shoring up cybersecurity to protect their customers from falling prey to hackers, who hope to gain access to credit cards, bank accounts, and basic identity.

But what about fraud that has already happened? What recourse do you have if you’ve been a victim, and what are your chances of getting restitution? Here’s a rundown.

Report the Scam
In one study, only an estimated 14 percent of victims reported the scam, whether because they were embarrassed, felt it was futile, or simply didn’t know where to report it. But reporting is important because it establishes accurate statistics on the number of people affected and because the FBI and other law enforcement agencies devote considerable resources to breaking up fraud rings. Start with the police (essential if you want to make an insurance claim on stolen property) and report compromised credit or debit card information to the card issuers. The AARP Fraud Watch Network also has a hotline available to anyone (877-908-3360), and volunteers there can advise you of the best next step if you’re unsure of what to do.

Think Locally
This holds true even if you’ve been acted on globally. For most scams involving goods and services (nonexistent vacation properties, for example, or a fake employment agency), try your state attorney general’s office, your local and state consumer protection agencies (go to usa.gov and search for state consumer protection offices), the Better Business Bureau, or, depending on the crime, the FBI’s Internet Crime Complaint Center, known as IC3.

Match the Agency to the Crime
If the fraud you’ve been a victim of violates federal law, as is often the case, there’s probably a government agency that handles it. Go to usa.gov for a list (beginning with the Federal Trade Commission, an excellent all-purpose first stop for victims of all types of fraud) and the relevant crime to report there (from income tax debt collection fraud to income tax refund fraud). If your identity has been stolen, identitytheft.gov will take you through a list of steps to take. For financial crimes, finra.org (the website of the Financial Industry Regulatory Authority, which is not a government agency) has a useful listing of groups that specialize in investment fraud and a discussion of possible ways to recover losses, including arbitration. Type in “report fraud” at finra.org, and search for “A Recovery Checklist for Victims of Investment Fraud.”

Focus on Emotional Healing
Federal agencies rarely track down perpetrators of crimes against individuals. Rather, they use complaints to record patterns of abuse, which enables an agency to take action against a company or industry. Given the global nature of most fraud today, not to mention the current climate of deregulation and understaffing in Washington, D.C.—the Consumer Financial Protection Bureau has reduced its second-quarter budget request to $0 and said it will direct its energy toward “address[ing] unwarranted regulatory burdens”—consumers should be realistic about their poor chances of legal redress. That’s why many experts emphasize emotional recovery. “Instead of yelling at the victim ‘How could you be so gullible?’ ” says Amy Nofziger, a fraud expert at AARP, “I encourage family and friends to be empathetic—say, ‘I’m really sorry this happened to you but it did, so now let’s figure out how to get past it.’ ”

Editor’s Note: This article also appeared in the June 2020 issue of Consumer Reports magazine.

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