‘Easy money’ advert costs woman $7k

A Bay of Plenty woman is $7000 out of pocket after investing in a scheme to “make easy money from home”.

The woman, who does not want to be named, clicked on an advert after reading an article online.

She watched some videos online about how to do it and then rang the company, whose call centre was in Scotland. She was put on to a broker to tell her what to do.

The woman signed up online and set up an account with an initial investment of US$300 ($415) and began trading in currency.

“I was naive, I didn’t know about trading. It was totally out of my league.”

But she made a few wins and was convinced to put more money in. This time it was US$5000.

Then she got nervous and decided she wanted to pull her money out.

The broker began making repeated late-night phone calls wanting her to make more trades.

In the end she threatened to call the police and had the number blocked and he stopped calling.

The woman had been investing in an unlicensed binary option trading scheme. Binary options enable you to make, or lose, money by predicting the short-term movements in the price of a share, commodity, currency or index.

More than a third of complaints to the Financial Markets Authority relate to overseas companies that offer binary options or forex trading.

The trading is not illegal but is considered high risk, even for experienced investors.

The FMA is highlighting the woman’s case as a warning to other New Zealanders to use licensed financial service providers as part of World Investor Week, which started yesterday.