This video includes real investors who were defrauded by a binary options trading scam. Welcome to part one of our series, The Truth
Behind Binary Options Fraud. I didn’t really know what binary options were. I had heard of them, but I didn’t know what
it was about. Online, it was the latest craze and everybody
was talking about them. I thought that, “Well, you know, for $300
I could get involved.” It wasn’t gonna be a lot of money. The assumption was made by me that these guys
were on the up and up. It was all just a made up scheme to actually
defraud the investors. Binary options trading is a yes/no proposition. You choose a position based on your prediction
about market conditions. Depending on the outcome you either receive
a payoff or lose money. Unlike other options, there are no shares
to exercise. Like many investments, binary options can
be a risky form of trading. But not all binary options trading is fraudulent. They can be legally traded on regulated exchanges
in the United States. But there are many other websites that operate
illegally and commit fraud. This video focuses on those that operate illegally. Here are some of the ways they operate. One night you’re home on your computer. You see an ad on a search engine, receive
an email or see a comment on your favorite investing website. The offer sounds interesting, sophisticated. Fraudsters may begin by creating professional
looking websites that resemble legitimate trading platforms. On these sites investors can quickly and easily
open accounts, fund the accounts with their credit cards, place binary trades and manage
gains and losses. But are you really trading at all? The website itself was great. So really on the surface it looked like a
great operation. The reality, the trading software is often
fake and so are the resulting profits you think you’re making. Next, fraudsters use search engines, emails,
and popular investor websites to advertise their amazing trading system. Even posting fake testimonials and reviews
on their websites and social media. Customers might be randomly searching the
internet looking for various investment opportunities. And they see an ad from a binary options firm,
promising high rates of return with limited risk. They see the trading screens and they see
what looks like an opportunity that they can make some money in. They also hire call operators trained in aggressive
sales tactics and complicated market speak. With everything in place, the fraudsters can
set their plan in motion. You’ve got a broker that’s calling you. You’ve got, you know personal attention happening. You know they’re excited that you’re part
of their platform. Rather than scare off prospective investors
with asks for incredible sums of money, these fraudsters often start small. You can open an account online for only a
couple hundred dollars and try it out. When you see a modest gain in your account
or attempt to withdraw the funds, the real pitch begins. It’s a death by 1,000 cuts approach, employing
a number of tactics to increase the amount of money you hand over to them. Here are some tactics fraudsters commonly
use: • An expert broker calls, offering to help
you make even more money by trading for you. • They offer to match the dollar amount
of your next trade, if you increase your investment to a certain amount. • They offer an insurance policy, so that
your losses are covered. Collectively, these tactics compel unsuspecting
customers to believe that placing more money into this operation will make up for losses,
or increase gains. What’s really going on? The credit card you used to open the account
is being drained. In some cases, the fraudsters have committed
identity theft, running up charges or selling your information to other criminals. There was a woman, supposedly one of the supervisors
involved, got on the phone to me, called me and said, “You can’t tell me that you don’t
have any more money available on some credit card.” I said, “That’s it, I’m maxed. “I have no available funds.” It turns out they actually initiated some
withdrawals on some of my credit cards that put them over my limit. I didn’t even know the credit card company
would do that, but they did. In some cases, your money is being shipped
overseas, lining the pockets of those running the operation. When your money is gone or you try to withdraw
your funds, suddenly you hit a road block. Here are a few common victim experiences you
should be aware of: • One, you can’t access your account or
withdraw your funds. If they require a few for any reason that
enables you to withdraw, do not give them more money. • Two, your broker has suddenly left the
company and they can’t honor the terms he or she offered, including the insurance you
purchased. • Three, you experience radio silence. They stop returning your emails and calls. If you experience any of these, you should
contact the U.S. Commodity Futures Trading Commission, the CFTC. The CFTC works to protect market users from
fraud and market manipulation. They may be able to help in the even you suspect
you’ve been targeted by a binary options scam. No matter how enticing a deal or an investment
may seem, it’s important to remain skeptical, ask questions and always ensure that the binary
options exchange or broker is registered with the CFTC. We just walked you through how a hypothetical
fraudster builds his operation to fool smart investors. In our next episode, you’ll see how dangerous
these worldwide operations can be to individuals like you.


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