Tips For Avoiding Scams
Tips For Avoiding Scams
In a perfect world, the people we do with business with would have the same mutual interest that we do, of wanting to do good, honest work that results in a win—and profit—for everyone. Unfortunately, that’s not the world we live in, and some individuals and groups prefer to make their living by making empty promises that fool innocent business people and investors, taking their money based on those promises, and then simply walking away, leaving a trail of victims behind them.
Sadly, the online world has made it even easier for scammers to do their work on unsuspecting clients and customers. The anonymous nature of the Internet, and the ease with which people can create convincing websites and then communicate with people through e-mail make it fertile ground for scamming operations to fool people out of their money. This leads us to binary options trading, where scammers can, and do, make a living by dishonestly parting people from their money. Why does this happen? What can you do about it?
The Binary Options Scam
Binary options trading is, itself, a completely legitimate form of trade. However, the online nature of both the trading and the service providers, combined with the relative newness of this trading technique, is what have made it a destination for some scammers to ply their trade. Unlike traditional stocks and commodities trading which previously required large, established brokers to do business with, the lack of any extensive physical operations, and the online activity required mean that only a convincing website is required to lure uninformed interest towards a service.
When this is combined with the fact that people open online accounts with a service provider, and, potentially, never see or speak to the people involved except via e-mail or maybe telephone, it’s much easier for scammers to convince people they are legitimate services, since they all binary options traders operate in this way. Where the difference comes in is in what scammers do with the money and personal/financial details that unsuspecting customers give them.
A typical scammer will simply take the money, claim that a trade was a loss, and ask for more money for more trades. Of course, every subsequent trade will also be a loss, and so in this way, the customer simply gives more and more money to the scammer for nothing in return. Worse yet, the scammer may not be interested in getting money directly from the customer. Instead, “identity theft,” is the ultimate goal, with the scammer requiring information such as bank account numbers, passwords, credit card numbers and even social insurance numbers. When this information has been given, the scammer can simply access these bank accounts and directly, or start using the credit card to make purchases until the legitimate owner puts a stop to it.
How To Spot A Scammer
One of the first things you should do when you look at any potential binary options trading platform is get more than one opinion on the service. User reviews are invaluable in this sense, because the users themselves have no other goal than to make money, and if they’ve been scammed, they will be very loud and direct about it. An alternative method of sniffing out a scammer is when you discover a LACK of information about them. Any established binary options trading platform that’s been around for some time will have a mix of positive and negative responses, but to find no information at all about a service provider should raise a red flag.
Another thing you can do to protect yourself against scammers is to see whether or not a trading platform is licensed. If you a trader is regulated and licensed, this is 100% a legitimate business. However, and this is where it gets tricky, while all licensed services are legitimate, not all unlicensed services are scammers.
The reason for this is American clients. Currently, it is illegal for Americans to trade in binary options, and so, in order to remain compliant with international law, any licensed and regulated trading platform cannot accept American clients. However, an unlicensed trading platform can accept American clients. Many unlicensed trading platforms voluntarily adhere to international law and trading regulations, so just because a service isn’t licensed is not necessarily a black mark against them.
One of the best ways to spot a scammer is to see whether a trader employs a form of protection known as SSL encryption. This is an expensive but essential form of digital security that ensures a client’s financial details and transactions cannot be “eavesdropped” from online. Because of the substantial cost of SSL encryption, a scammer won’t take the needless step of spending money on this, since there will never be legitimate trades anyway. If you don’t see SSL encryption being offered, your money is not safe.
By exercising caution and common sense, you should be able to safely navigate the world of scamming.
Tips brought to you by 365binaryoption Trading.