A new "long con" Scam Of The Week: Binary Options

Most scams on the internet are "short con" scams, compare them to hit & run. However, "long con" scams have started to show up that can take a few months to finally steal the money.

In the last few weeks, government organizations in several countries have warned for a new scam on the internet called binary options. These scams lure you in with the opportunity to make money through movements in the prices of certain assets. As an example, so far this year people in Australia have lost $3 million to these scammers.

Binary options essentially allow you to bet on the movements of commodity, asset or index prices over a short time.

Although they may be a legitimate financial product with many licensed firms trading in them, binary options are speculative, high risk products that are almost impossible to predict, even for professionals.

The recent development is that there are specialized groups of scammers who use binary options to steal your money.

These scammers use high-pressure sales tactics to try and convince you to invest in a trading account, making claims that the system is simple and high profits are guaranteed. If you agree, they direct you to a website with a login, account details and the trading platform. They put your money into the account and demonstrate a number of successful trades to encourage you to invest greater sums of money.

Once invested in the scheme, victims have reported that their money begins to disappear quickly. When they try to withdraw from the scheme, they find it impossible to get their money out of the account. The scammer does everything they can to keep the victim in the program but inevitably they stop taking the victim's calls and, after a short period of time, it is common for the firms to disappear.

If you receive a phone call, get an email or see an online ad offering "binary trading" be very cautious. Do your research on the offer and the company. Do not agree to anything straight away.

How these scams work

You receive a call or email out of the blue offering a secure investment with fast, high returns. You might also come across these scammers through social media or online ads.
The scammers have professional looking websites to help them appear legitimate, usually with a login process, personal account details and a trading platform.
The victim invests money into the account and either the victim or an agent attempts to guess whether a particular commodity price will go up or down over short intervals.
If you guess correctly, the account is credited with a small return. If you guess incorrectly, you lose the entire amount placed. The odds are stacked against you so it is very likely that you will lose over time.
When you attempt to withdraw money, you find it almost impossible to do so and often lose the entire investment.
Binary option scammers will also ask for personal information, claiming they need it to transfer money or that it is required for anti-money laundering purposes. Providing this information can leave you open to identity theft.

Protect yourself

Consider any approach for investment offers carefully, especially if they are over the phone or the internet. Be suspicious of investment opportunities that promise a high return with little or no risk.
Check references, and your government's equivalent of the Better Business Bureau.
Do not let anyone pressure you into making decisions about money or investments - get independent legal or financial advice.
Carefully consider who you are giving personal information to, such as details from your passport or bank account, as this could be later used for identity theft.
If you are looking to invest your best bet is to just say no and look for a safer, less risky investment

Another potential long-con: CEO Fraud.

CEO Fraud can be both short-con and long-con. Read more about another long con where a Financial Services company got scammed out of 6 million bucks last week.

A lawsuit filed on Friday September 16, 2016 by Tillage Commodities Fund alleges that $6 billion SS&C Technologies Holdings, a financial services software firm, showed an egregious lack of diligence and care, when they fell for an email scam that ultimately led to hackers in China looting $5.9 million. Read more about this here.

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