Scam alert: binary options
The latest international investment scam being promoted on the internet and via emails is binary options. These options promote high returns but they are also highly risky and can be fronts for scams.
What is a binary option?
Binary options are a type of trading, which involves using financial instruments to profit from predicted movements, such as in index and commodity prices. Predicting movements in these prices is very difficult, it is basically a form of speculation.
There are some legitimate brokers that trade in binary options and are licensed by ASIC to operate in Australia. The majority of companies operating overseas are not licensed. To ensure you are dealing with a licensed entity check that they are registered in Australia before investing with them.
Be extra careful to ensure you don’t end up investing in a scam binary options trader and remember once you send funds overseas it is near impossible to recover them. These traders may still have legitimate looking websites, offices and phone numbers you call.
How to protect yourself from scams:
- Be careful of investment offers out of the blue, such as emails and phone calls about investments.
- If it sounds good to be true then it probably is. Do your research before investing in options that claim to provide high returns.
- Be careful about giving out your personal information over the phone, it could lead to your identity being stolen.
- Check out: ASIC professional registers to find out if a person or business has an Australian Financial Services Licence.
- ASIC has a list of companies that you should NOT to deal with.
Where we identify a transfer overseas that may be going to a scam trader we will attempt to block it to protect our customers, but ultimately the best defence in making sure you don’t become a victim is by ensuring you do your research before investing.