Many of our readers here at Finance Magnates will be familiar with the swathe of scam artists and con-men that made up a large contingent of the binary options industry. From rigging trades, preventing withdrawals and encouraging bad trades, many firms made millions fleecing innocent people of their hard-earned cash.
As a result of this, some regulatory authorities have now banned the sale of binary options to retail clients. Just last week, for instance, the European Securities and Markets Authority announced that it would be extending its binary options ban for another three months.
These bans may prevent investors from being scammed in the future but for those who have lost their money they offer only minor consolation. In fact, getting money back from scammers, who remain almost entirely anonymous, has been a challenge for most of the victims of binary options scams.
The recovery experts
Into this void has stepped a new type of con-artist – the ‘recovery expert’. Playing on the desperation of those who have fallen prey to scam artists, these people appear to be trying to trick the ex-clientele of binary options into parting with more of their money.
Finding these people is not difficult. Peruse the comments section of any news article covering binary options and you are likely to find a post along the following lines: I lost a lot of money trading binary options, thankfully company X helped me get my money back – just email company X here to find out more.
A visit to one of these websites generally yields similar results. Fake office addresses, fake US phone numbers and no indication as to who actually works for the firm.
Unsurprisingly, it appears that these firms also require up-front payments so that they can start your case. Of course, the likelihood of you ever seeing that money again is minimal.
One of the firms, Binary Options Recovery Specialist, even offers a set of hacking services, including password ‘recovery’ and credit score editing, alongside its binary options recovery resources. Anyone wishing to use their services must also pay in cryptocurrency – making it nearly impossible to determine who you are actually sending money to.
Another company, Dunde Wealth Recovery Group, even claims that it is owned by Merrill Edge – an online brokerage service owned by Bank of America Merrill Lynch. Not only this, but the firm’s site also says it is regulated by the UK’s Financial Conduct Authority, despite the company claiming that its office is in New York.
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US phone number, Ukrainian office
Determining who operates these sites is difficult but, in a couple of cases, we can see that they are not based where they say they are.
Users of Scam Warners found that investigators247, a site that claims it can recover funds lost to binary options scammers, was registered in Odessa, Ukraine, by Qui Hoang. This is despite the fact that the firm lists American phone numbers on its website.
A similar website, Wealth Recovery Now, lists its address as being in Ohio and provides users with a US contact number. The site, however, was registered in Canada and the person that set it up did not provide any name or contact information.
There are two main driving factors behind the creation of these scam websites. Most importantly, those that have lost money from binary options are usually desperate. These are not billionaires who can stand to lose a few hundred grand but regular people who may have lost their entire life savings.
Anyone in that position is likely to be desperate for help. This is especially true given how hard it has been for proper authorities, be it regulators or the police, to tackle scammers, most of whom are abroad and operate anonymously.
As such, those claiming that they can get people’s money back are catering to people who are likely in a state of despair. They need to get their money back and have a very small number of avenues to pursue in order to make that happen.
Equally important in this instance is, sadly, gullibility. People who have fallen prey to binary options scams are likely to have a limited understanding of trading, technology and financial regulation.
The scammers claiming that they will be able to get their money back are fully aware of this. Indeed, they use this fact to prey on them more and to take even more money from them.
Preventing such people from operating seems like a Sisyphean task. The site operators are difficult to find and, as soon one is shut down, another pops up somewhere else.
Perhaps the best means of stopping them would be to stop the supply of victims. Authorities could ensure there are better means of recourse and, as hard as it may be for them, victims of binary options brokers should not be tempted by any offers of funds recovery that sound too good to be true.