One of the worst feelings in the world is that of being scammed. Knowing that you have been taken for a ride and someone has profited at your expense can be hard to take.
The world of binary options is synonymous with scams. In fact in any industry where money is involved, very quickly scammers will emerge. These people will look for ways in which to extract money from anyone unlucky enough to cross their path.
Of course it is not only stupid people who get scammed. The saying that a ‘fool and his money are easily parted’ is only half the truth. Intelligent people are as likely to succumb to clever schemes designed to part them from their money.
It is however important to make a distinction between those who ‘believe’ they have been scammed and those that really have. This distinction is made as there are many people who are quick to cry ‘scam’ when in reality none has taken place.
1 A Lack Of Understanding
These accusations are generally made against the broker and result from the lack of understanding of the trader. Did they read the withdrawal conditions when opening their account? No. Did they check out the terms by which their deposit bonus was awarded? No. Did they trade Sixty second contracts and then complain that contract lost because it was one tick out? Yes!
These common complaints which can be found on many trading forums are not broker scams. Of course it is true that brokers may not be keen to advertise their long withdrawal times or the conditions with which they award you a bonus. However life isn’t fair and you need to be sure that you know what you are agreeing to before you sign on the dotted line.
Answer this. Would you be happy to hand over your money in any other aspect of your life without knowing the conditions that were attached? You would? Well then maybe you need to take some lessons in life skills and financial management. Most people wouldn’t. Don’t simply hand over your money to a broker on the Internet without first knowing something about them and the conditions attached.
Withdrawing money from your binary options account is often a contentious issue. It frequently leads to complaints and discontent among traders. Mostly this arises from a lack of understanding of the process. Only in very rare cases do traders fall victim and then only if they trade with un-trusted scam brokers.
Getting money into your account is simple. Brokers accept a wide range of payment types and deposits tend to be instant. This however contrasts with withdrawals. These can take several days to perform. The reasons for this are not only down to your broker. Regulatory requirements and bank processing times also add to the delay that can be apparent whey trying to get hold of your funds.
The process of withdrawals is generally quoted as 3- 5 workings days by most brokers. This can seem longer as most brokers do not work over the weekend. The process starts with validation of your identity so you will have to submit the requested documents so that your withdrawal can be processed. Once your withdrawal is processed you will then be at the mercy of your bank or payment processor to put the request through.
Your broker is not trying to steal your identify (at least the regulated ones aren’t). The reason they ask for identification documents before you can withdraw is to prove your indentity to prevent fraud. Any decent broker will request this information from you. You may have to provide photo ID (passport, driving license), proof of your address or of the card you want to withdraw to.
Time and time again we come across complaints regarding broker bonuses. Many people make the mistake of believing that their brokers are generous and want to shower them with free money when they make their deposit! This of course is not true and this is where the problems start.
The bonus provides an artificial boost to your account balance. This allows you to trade proportionally higher than you would be able to do with your deposit alone. This allows you to accumulate more profits, but the trade off is that you will need to trade around 30 times the value of your combined deposit and bonus value before you can withdraw from your account.
This is not a scam but part of the conditions that the broker will attach when awarding the bonus. You did read the terms and conditions before accepting it, right?
If you are trading with a regulated binary option broker then make sure you read the terms before accepting and that you are happy with them. If you are not confident or don’t understand the terms then don’t take the bonus. If the broker is not regulated or you have not heard of them before, never take the bonus. Oh, and steer clear of them completely!
4. Platform Pricing
This complaint mainly occurs among traders who choose to trade short term contracts. They often complain of being stopped out of an in the money trade by one tick, which of course is the difference between a profit and loss on their account. This can be particularly hard to take if you are using a separate charting package which shows your trade winning.
We have for a long time advocated avoiding such short term contracts for this every reason. The pricing on these contracts is at best, a grey area and could be open to manipulation by an unscrupulous broker. Even if your broker operates their platform in a saintly manner, with such small margins of error, it is inevitable that at some point you are going to have trades where the outcome is contentious. Do yourself a favour and steer clear of these trades and you will eliminate any potential problem.
5. Third Party Scams
The binary options industry has thrown up a number of satellite business that look to profit from the boom in binary options. The most common of these are systems or gurus who purport to be able to make the trade money.
Signal services and ‘automated trading binary option robots‘ are being marketed that claim to make profiting from trading easy. These promises of easy riches often prove tempting to the struggling new trader who has yet to acquire the skills needed to make money. As a result these services can prove highly lucrative for vendors looking to exploit naive traders.
The worst offenders tend to want you to sign up with a shady broker that you have not heard of to get access to the signals. From the start you are putting your money at risk before you even place your first trade. Unfortunately such practices are not covered by regulation so you really are at the mercy of the vendor. Taking such a path will rarely have a happy ending.
The lesson that we can learn from all of the above is that whether the scam is real or the result of a misunderstanding or a lack of information, the one way in which you can protect yourself is to be informed.
Spend time trawling the net, reading reviews and making comparisons. The reviews and information that we publish on this site can help you to shorten this process and steer you in the right direction. Remember that it pays to be later to the party in some instances rather than jumping straight in. And if in doubt, stay out!