WHAT ARE BINARY OPTIONS?

Binary options are theoretically an online wager (disguised as an investment) that is essentially a “bet” as to whether an asset’s value will increase or decrease over a short fixed period of time – similar to online gambling. In reality, most of these websites are fraudulent. In gambling terms – “the house always wins” – meaning you lose.

REMEMBER:

It is illegal to trade binary options in Canada and there are no registered binary options dealers, traders or brokers in this country.

How you may be approached

Online: There are numerous online binary options trading platforms that target investors through online advertising. The ads are very enticing; investors will click through to a sophisticated-looking website where they can easily open an account and start trading with as little as $250. The websites promote their trading as a simple way to make easy money with returns as high as 80 per cent.

Remember: If it sounds too good to be true, it is too good to be true. If money was this easy to make, wouldn’t everyone be rich?

Through someone you know: A friend or an acquaintance may tell you that binary options trading is an easy way to make money and something you should try out.

Remember: When you first start trading binary options, it looks like you’ve hit the jackpot. Your trading account will reflect that. These funds won’t be transferred to your bank account. When you try to withdraw your funds, the company may say you have had a bad day and lost your money or will not return your calls.

RED FLAGS TO WATCH OUT FOR

Many binary options trading platforms have websites that look professional but it’s very important to scrutinize the website for warning signs such as these:

  • The company/person is not registered in Alberta or Canada as a trader or
    broker. This can be verified on checkfirst.ca.
  • The company description is vague with no information about the
    management team.
  • Besides its website, there is no searchable information on the company.
  • There are grammar and spelling mistakes.
  • Contact information is not accurate. The company may list offices in New York, but when you do a search or try to call, the company is not found.
  • Company is located overseas.

Tips to help protect yourself from online investment fraud through binary options platforms

  • Don’t become a statistic. Simply put, don’t invest in binary options trading.
  • Do not give out personal information to a person or company you don’t know and trust. If you unknowingly hand over personal information (including credit card, driver’s license, SIN, etc.) to a scam artist, they may make unauthorized transactions on your credit card our use your personal information to steal your identity.
  • Never make an investment decision in a hurry. Always take time to research the opportunity.
  • Be suspicious. If an online investment you are considering is offering returns higher than what the banks offer, that may be a red flag.
  • Low risk, high-return investments don’t exist. The higher the return, the higher the potential risk. All investments carry some level of risk.

Watch out for recovery room scams

If you become a victim of a binary options trading scam, you may be contacted by another scam artist who says they can recover the money you lost. They will say that you just have to pay the taxes or a fee to recover your money. This is another scam and once again, you have lost your money. Scam artists sell victim’s personal information so they can be targeted again.

What to do if you believe you’ve been involved in a binary options trading scam

  • Contact the ASC, we’re here to help: inquiries@asc.com or 1-877-355-4488.
  • Tell a close friend, family member or someone you trust. This should not be kept a secret.
  • Cancel your credit cards and other related financial accounts which might be at risk.
  • If you provided the company with your passport information, contact the Canadian government.