Sir Richard Branson warns that criminals are using his name to dupe people into buying fake investments as statistics show shocking rise in binary options fraud
The City of London Police, as lead force for fraud, is warning the public about the growing problem of criminals using the reputation of prominent people to give investments credibility. Sir Richard Branson has spoken out after growing increasingly frustrated by fraudsters claiming that he, or his companies, are involved or invested in them.
How Binary Options fraudsters entice victims
Victims have contacted Sir Richard Branson when they have discovered that their investments are worthless or non-existent.
Fraudsters often use aggressive sales techniques or names of prominent people or business locations to entice victims to invest.
Action Fraud, the national fraud and cyber crime reporting centre, has seen a large increase in reports of binary options fraud with the number of reports tripling in the last financial year, with the financial losses increasing from £2million to £13million during the same period.
Binary Options are not currently regulated by the Financial Conduct Authority (FCA), so investments in them are not protected by the UK’s financial services complaints and compensation scheme. The FCA have however issued a warning regarding fraud linked to the trade.
Some countries have banned the trading of binary options.
Fraudsters posing as Binary Options traders on social networks often use the promise of unrealistically high returns on ‘investments’ to lure potential victims.
Fraudsters “taking advantage of unregulated market”
Sir Richard Branson, Virgin Group Founder, said: “I am determined to prevent anyone being confused into giving money or their personal information away on a false pretence. These scams can be terrifyingly deceptive and I would urge everyone to look out for these stories and report them as soon as you see them.”
Detective Superintendent Glenn Maleary said: “Action Fraud and the City of London Police have seen an increase in binary options fraud in the last two of years. Opportunist fraudsters have taken advantage of an unregulated market and done everything can to defraud unsuspecting investors.
“Anyone who invests in binary options should be vigilant about who they are trading with and should follow our protection advice to ensure that they don’t fall victim to what is becoming a commonplace investment scam”.
When do Binary Options become fraudulent?
Fraud may be occurring if Binary Trading platforms:
- Offer a higher than average return on an investment.
- Refuse to credit customer accounts.
- Break all contact with the customer
- Manipulate software to distort prices and payouts.
Protect yourself against Binary Options fraud
If you’re considering any type of investment, always remember: if it seems too good to be true, then it probably is. If you get a call out of the blue from someone offering investment opportunities, reject the offer; if in doubt don’t be polite, just hang up. If in doubt, where you think a firm offering binary options may not be trustworthy or legitimate, do not transfer money to them or provide them with your bank details.
Be mindful of any bonus structures and clauses preventing you from withdrawing funds. Make sure you have read and considered conditions set out by the company making it mandatory to “turn over” your original deposit over a multiple amount of times before you can withdraw your money.
The Gambling Commission advises that UK consumers should research the market carefully before participating in such activities. Check whether a company holds an operating license from the Gambling Commission by searching the public register of licensees.
If you think you have been a victim of fraud you should report it to Action Fraud. The City of London Police last year requested the suspension of over 160,000 banks accounts, websites and phone lines suspected of being used to commit fraud.