Do you know what a Binary Option is? I will give you a brief primer on Binary Options before I tell you how these scams work and how to protect yourself from being scammed. The vast majority of Binary Option Companies are located abroad.
Binary Options Primer
When stocks are traded their value can either go up or down. A financial instrument exists where you can make money by correctly predicting if a stock goes either up or down in value at the end of a specific time interval. Minimum bets start at $100. You make a bet by selecting the stock or financial asset like currency pairs, then the amount you wish to bet, and finally the time duration. This can be as little as one minute to as long as several hours. At the end of that period if the value of your asset has risen in value by as little as one cent, you double your money. If it drops in value by one cent, you lose your stake. It doesn’t matter how high or low your asset ends up you either double your bet or you lose it.
Sounds simple right? It appear’s you have a 50/50 chance of either winning or losing. Not so fast. This is not like flipping a coin. There are several factors at play that could stack the direction of the assets value either way. If you do not educate yourself substantially, the odds are against you. But the scam artists do not tell you that.
The Hook
The scam artists will connect with you by various means. Phone calls. Texts. Emails. They select individuals who are trying to develop new ways to create an income. Presentations are made to illustrate that the probability to make money is quite high. Initial cost to try the opportunity is relatively low. After you create you4 account and make your deposit it’s not long before you see your investment double and even triple. You’re invited to invest more. And if you falter they suggest taking* your money out.
Leveraging Borrowed Money
Once you get the feeling it’s easy to take out your winnings, greed takes over. The next step is to make a deposit using a credit card. They suggest this to give a feeling of security. If they scam you the credit card company will cover your losses. So you make a deposit of $1000. An account manager is assigned to give you advice and guide you. And by magic your account doubles again. The account manager suggests you make an even bigger deposit of $25,000.00.
If you balk once again they will tell you to take out your money. And you do that. By now, you’re putty in their hands as greed completely takes over. You tell them you don’t have $25,000.00. Your account manager starts to play with your mind. They counter that for this month only the company is offering a special deal. If you find a way to invest $25,000.00 they will give you a matching bonus bringing your account up to $50,000.00. You need to sign an agreement that you will not be able to make a withdrawal until your account doubles again. To sweeten the deal, your account manager who happens to be a master trader will trade for you. Your account can be accessed anytime so you can track your earnings
Leveraging More Borrowed Money
Your account manager suggests you apply for one of those high interest loans that are easy to get. He convinces you that you will be able to pay the loan off using the profits in your account before the first loan payment is due. This argument is so compelling especially the thought of being given a matching bonus. You go for it and get that loan. You can hardly wait to make that deposit. Once it is in you see your bonus added and your balance reads $50,000.00!
You can hardly believe your mind when you see your account growing by between $1000 and $3000 each day! It’s not very long before you have over $100,000 in your account. You have a feeling of euphoria and start thinking* it’s possible to become a millionaire. Your good fortune is overwhelming. You try to make a withdrawal of $25,000.00 to pay off your loan. Your account manager informs you that the agreement you signed had a clause saying the bonus $25,000 needed to grow six times before you could make any withdrawal.
Panic Time
Your euphoria turns to fear. Have you been scammed? Your account manager tells you the amount in you’re account is your money. At the rate of growth your account balance will soon be at the level where you can make any withdrawal you want. Even all of it. You find your account manager is not accessible like before. He had to go home for family reasons. A new account manager is assigned to you. He is more difficult to get hold off. You now contact your Law Firm to get you out of this mess. They find out this company is headquartered in a foreign company. This information was available to you if you only knew where to look.
Your lawyer sends them a legally worded letter demanding your money is returned to you. The company stalls and you get nothing back. The company is located in another country so your lawyer can’t sue them abroad. What seemed like a nice nest egg in your account, that you can still see when you access it, is getting more and more unattainable.
Let’s face it. You’ve been scammed. Not only is your investment of $25,000 gone but you have to pay that back to the loan company.
Responsibility
Who’s responsibility is it for this disaster? I have a confession to make. This happened to me. I was able to renegotiate the loan with the good graces of the loan company. Although I was scammed, I took full responsibility for this result. I should have known better. When something is too good to be true it is. My emotions were manipulated by skillful agents in this fake company. When I researched this scam I found out that most of the companies were located in Israel. The Israeli Government were well aware of this situation and had taken legal steps to close these companies down. I found out that the company that scammed me had their main offices in Israel and used a UK address as a shell to make it seem they were legitimate.
Steps to Avoid Binary Option Scams
1) Do not get involved in the first place. If you are invited to participate in a Binary Options program, run as far away as possible. Metaphorically speaking off course.
2) If you do get hooked like I was with early small profit payouts, take your profits and do not invest any more money no matter how attractive their argument is.
3) Get as many details regarding names, addresses and phone numbers and report them to the FBI.
It all comes down to common sense. I should have sent my agreement documents to LegalShield for review. I have asked myself so many times why didn’t I do that. I am ashamed to say I knew what they would tell me. Can you guess what that is? I didn’t want to hear them tell me not to get involved. I was hooked into the prospect of making a lot of money easily and quickly.
A red flag should have gone up when they persuaded me to get a loan to invest. They made it seem low risk so I didn’t even think of the real risk I was taking. The risk of losing it all. Greed took over me.
Lessons Learned
Binary Option Scams are more prevalent than you think. Just enter Binary Options Trading into Google. You will be amazed at the plethora of programs that will show up. I guarantee you all of them are scams. I spoke to some lawyers in Israel who told me so. They are trying to pick up the pieces for clients who invested hundreds of thousands of dollars. I considered myself fortunate that all I invested was $25,000. And I am even more fortunate that I negotiated a deal where I would pay back half over a two-year period with no interest and have my account paid in full.
Why Am I Bringing This Up At My Website?
In like to think of it as using my sorry experience to pay it forward to people who read my story. Do not do what I did!