Trading Standards is warning residents and groups working with young people about a new
scam where social media users are tricked by con artists pretending to play the
stock market.
Nationally,
a warning has been
issued about fraudsters using social media networks to encourage young
people to invest in binary options, also known as Forex trading, in which an
investor bets on commodity value changes.
In genuine Forex trading, which can take just a few
minutes, an investor 'calls' or 'puts' an option, respectively betting on it
rising or falling. If the investor predicts incorrectly they will lose all the
money they have placed. Although binary options are being advertised as an
investment, they are actually a form of gambling on the markets.
Fraudsters have set up fake profiles
online and pose as successful binary option traders. They seek out potential
victims and offer the chance to invest and send off money. Initially their victims are told the short term investment was successful to encourage them to send
more money. In some instances the fraudsters also demand further funds in order
to release the victim’s money.
No trades are believed to actually take place, and victims are asked to
pay either via a bank transfer, direct to another bank account controlled by
the fraudster, or via a money transfer agent such as MoneyGram or Western
Union, all untraceable.
As soon as a victim becomes suspicious and asks for their money back,
the fraudster will block them on social media.
Binary Options Trading is not regulated by the Financial Conduct
Authority and as such anyone believing they have invested will not have access
to the Financial Services Compensation Scheme, leaving people out of pocket and
with no recourse to the investment watchdog or compensation.
Trading Standards advise residents to be suspicious of any approach
which is made via social media as no reputable brokers would do this. Never give
out personal details and never agree to anything or send money up front,
without making your own enquiries into the company or individual first.
Back to Top
|