What to do when you think your binary options broker has scammed you

Because we are receiving increased volumes of complaints by traders who allege they have been scammed by binary options brokers, we decided to publish this short post to readdress certain basic points regarding this issue.

First of all, although much easier than trading forex and thus more accessible to the common person who does not have any experience, knowledge and skills to fully comprehend the complexities of how markets operate, binary options trading on the various asset categories usually offered by broker is still a risky endeavour. Perhaps, even riskier than forex under certain conditions, and this is why many condemn binary options trading saying they amount to nothing other than pure gambling.

Having this in mind, if you decide to open a trading account and invest on binary options trading you must know and anticipate there are risks involved and be prepared to undertake or even better mitigate them. Most complaints we receive usually have to do with problems during the withdrawal process, but since we have already referred to this topic extensively, we will concentrate here on some other relevant issues.

The first piece of advice we have to give is to prefer to open an account with regulated brokers rather than unregulated ones. We realize that unregulated brokers may often be offering attractive terms in terms of bonuses and other perks in order to attract your custom, and many traders, especially inexperienced ones are dazzled and convinced to open an account. Moreover, many traders are unfortunately not aware that there are regulated brokers or they don’t know where to look to find out whether a broker is regulated or not.

Trading through a regulated broker ensures two things: first that at least a minimum of rules and regulations, especially when it comes to trader protection, are upheld by the broker in order to satisfy the regulator’s requirements and be granted a license. Second it gives you a higher authority to resort to if you feel that the broker has scammed you, acted against you, not honoured their promises etc. Filing an official complaint with a broker’s regulator gives you the chance to prove you are right and allows the regulator to intervene on your behalf to the regulated broker. Regulators can convince brokers to comply if they think you are right because they have the power to impose sanctions and fines on a regulated broker under their jurisdiction, even suspending or revoking their license for serious offences.

Moreover, often if you are dealing with a regulated broker even the threat of filing a complaint against them before the regulator could convince them to abide by the rules in the dispute between you because they would want to avoid tarnishing their reputation or putting the regulator on their back.

To be sure whether a broker is regulated or not make sure you look for relevant information on the broker’s website. All regulated brokers make sure you know they are regulated and stress how this makes them more reliable and safe to trade through, often citing details of their regulation dates and license numbers, so you shouldn’t have a hard time finding this kind of information. However, because often unregulated brokers may cite some sort of unclear references implying that they are somehow regulated somewhere, all traders need to be sure about this aspect prior to opening an account and parting with real funds. Therefore, before entering into a binding relationship with a broker traders should check the websites of regulators, which always feature comprehensive and updated lists of the entities that are truly licensed and regulated by them as well as blacklists and warnings on brokers that are not and thus traders should avoid.

All these being said, we know that some of you may have erroneously decided already to set up accounts with an unregulated broker and are now in a position to have a complaint from them, without a higher authority to resort to and present your case. If this is the situation you have found yourself in, things are difficult but some options still remain. If you feel you are right and the broker is wrong and is trying to deceive you either by withholding your deposits, not allowing the withdrawal of profits made or in any other way you must amass your patience and resolve and firmly demand that the broker meets the terms of your mutual agreement.

Because even unregulated brokers value their good name a lot, threatening to defame them over the web by providing testimonials against them on news portals, traders forums, reviews websites and other relevant locations, could make them weigh the impact of such a campaign and decide to grant your requests to avoid the bad impact and tarnish on their name. To stand any chance of succeeding however you need to be firm and persistent and clear as to your demands and intentions, since often unregulated brokers will try to avoid any further contact with you if your initial purpose was to deceive you.

 

Unfortunately, if the broker you had chosen is an outright scam there is little you can do after the scam has taken place. However, you still share your experience in order to prevent other traders from trusting such scammers in the future and you should be more careful in the future and select who to make business with more prudently.

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George Milios

George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.

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