How Do Scam Brokers Operate and How to Identify Them
How Do Scam Brokers Operate and How to Identify ThemJuly 20, 2014
The binary options industry is changing rapidly and becoming more regulated and professional. However, there are still some brokers who manage to slip through the cracks and operate a scam business designed to be short-term profit maker based on defrauding traders and stealing their money.
How To Identify These Brokers:
Seek Regulated Brokers:
An officially accredited broker would risk losing their license. An official CySec license for example costs around 200,000 Euros, and also includes various ongoing fees. Too many complaints will get the broker sanctioned, and ultimately they will have their license revoked without the ability to get their investment back.
Avoid Brokers that Don’t Offer a Call Back Number:
Some operations don’t even have a number to call back. This is because they don’t pay out winnings and are not interested in having traders badgering and yelling at them all the time concerning payments.
Usually there will be a lot of complaints and muck raking when brokers such as Optimarkets and XPMarkets are concerned, so look for good reviews for brokers like Redwood Options.
US traders looking for a good binary options broker will have to take a slightly bigger risk since currently there is no regulation in America for binary options. However, Cherry Trade is a completely honest broker offering great service and timely payments.
Some Scummy Tactics:
Some brokers will call and tell you that you have money and they need your credit card in order to payout. In fact, the exact opposite is true and you will eventually be billed for deposits. In other cases they will try to get you to deposit and say “same day withdrawals”. Obviously this is a hoax and will never happen.
To sum up, there are various ways to identify rogue brokers. The first is to inquire about withdrawal policies. In fact, if you have an alternative depositing method such as Paypal or Moneybookers, it would be smarter to use those to avoid your credit card information being exposed. Secondly, if you feel there are too many hurdles involved when trying to cash out, look for another solution. Finally, if you find it difficult to speak with someone over the phone (not to mention chat), run away and never look back – you are being scammed.