Call for crackdown on £300m binary options scam

THE Government was urged last night to help protect thousands of British investors at risk of becoming fraud victims.

Binary options trading allows punters to bet on a share, currency or commodity moving above or below a set price.

A winning result means the stake is returned plus a profit of between 50 to 90 per cent. Otherwise the entire stake is lost.

Rogue firms have moved into the field, making it a fast-growing fraud that is estimated to have cost UK investors £300million. The Financial Conduct Authority, which starts regulating binary options this week, said: ‘Firms may manipulate software to distort prices and payouts – then they suddenly close consumers’ trading accounts, refusing to pay back their money.’

Alexander Eristavi, from the National Fraud Intelligence Bureau, said: ‘What we see is the tip of the iceberg because a lot of people think that they lost their money legitimately. The only people who complain are those who have won and try to withdraw their money.’

One victim, a company director who worked for years in the City, said he had lost £200,000. ‘This needs to be banned, not regulated,’ said the 62-year-old, who did not want to be named.

Binary options trading has been banned in Canada where Jason Roy, a leading investigator, said: ‘There is nothing good about this product.’

A 32-year-old retail operations manager from West Yorkshire attempted suicide after losing £500,000 of his family’s cash. Seeking investment opportunities he had put his details into a website. ‘I got an anonymous call from a salesperson who said I only had to invest £250 but was under no obligation,’ he said.

‘They had a trading platform and they showed me how to trade options. I thought this was OK but with hindsight I realise it is like tossing a coin.’

He said that upon trying to withdraw his money: ‘I saw my account go to zero as I looked at my computer screen.’

This needs to be banned, not regulated Victim who lost £200,000