Toronto, ON, March 27, 2017 – The pitch fraudsters use when selling binary options often goes something like this: “I made over $2,000 with binary options this week. What are you waiting for?”
“The promise of easy money can be alluring but if it sounds too good to be true, it probably is,” says Terry Campbell, President of the Canadian Bankers Association. “Consumers should be skeptical of websites offering binary options bets and instead take the time to research investment opportunities thoroughly to avoid taking a gamble that never pays off.”
How it works
Binary options are a bet on the performance of a stock or currency. If you’re right, you win, if you’re wrong, you lose, hence the term “binary”. No individuals or firms are registered to sell binary options in Canada, which is a good reason to avoid them. Here’s how criminal operations offering fraudulent binary operations work:
- Victims are solicited through social media, targeted online ads, chats, mass texts, and cold calling.
- You are then directed to legitimate-looking websites where automated responders will ask you to place bets on short-term fluctuations in stocks or currencies.
- Very often, sign-up bonuses or credits are offered but the victim is always required to input personal banking or credit card information in order to activate an account.
- If you’re fortunate enough to “win” the bet, it becomes very difficult to obtain your winnings. The realistic-sounding trader will suddenly stop responding and ignore your emails and calls.
- These operations are based in overseas jurisdictions that are beyond the reach of Canadian authorities and regulators, leaving victims with little or no legal recourse for reimbursement.
- Some scams go as far as using your financial information to steal additional funds from your account or make fraudulent purchases with your credit card.
How to avoid it
- Be very suspicious of offers for “easy money” at low-risk.
- Do your research before committing to a financial investment of any kind.
- Check if the company is registered with your securities regulator, and remember that no individuals or firms are registered to sell binary options in Canada.
- Always check your bank account and credit statements for unauthorized charges.
- Don’t give out personal information on the phone, through mail or over the Internet unless you have initiated the contact or know with whom you’re dealing.
- Check your credit report regularly to ensure your personal information hasn’t been stolen and used to obtain fraudulent loans.
If you suspect you might be a victim, report it immediately to your financial institution, the police, and your securities regulator.
This is the fourth in a series of weekly releases being issued by the CBA during Fraud Prevention Month. Previous releases have focused on phishing emails, the “overpayment scam” and identity theft.
The CBA is issuing tips and information through Twitter using the hashtag #FPM2017 (@CdnBankers) and its website www.cba.ca throughout the month of March. Canadians can also subscribe to the CBA’s free Fraud Prevention Tip.
- March is Fraud Prevention Month, and throughout the month, the CBA is providing Canadians with information to help protect themselves from fraud.
- The CBA is a member of the Fraud Prevention Forum. The Forum is comprised of a concerned group of private sector firms, consumer and volunteer groups, government agencies and law enforcement organizations, who are committed to fighting fraud aimed at consumers and businesses.
- Through its partners, the Forum, chaired by the Competition Bureau, works to prevent Canadians from becoming victims of fraud by educating them on how to "Recognize it. Reject it. Report it."
About the Canadian Bankers Association
The Canadian Bankers Association works on behalf of 61 domestic banks, foreign bank subsidiaries and foreign bank branches operating in Canada and their 280,000 employees. The CBA advocates for effective public policies that contribute to a sound, successful banking system that benefits Canadians and Canada’s economy. The Association also promotes financial literacy to help Canadians make informed financial decisions and works with banks and law enforcement to help protect customers against financial crime and promote fraud awareness. www.cba.ca.
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