According to FINRA – Financial Industry Regulatory Authority, one of the biggest American independent regulators has warned all investors to be precautious with security companies that allegedly want to help binary options victims. To be more specific, it has been noticed that those companies take a certain fee for “helping recover lost money” from victims that have already lost their money. Finra has announced a news release about this new fraudelent concept that has become a trend.
Recovery Room Mechanism
This action is usually called Recovery Room and it is one of the newest fraud mechanisms that has appeared in the binary options industry. It is very important to know the difference between real federal agencies that successfully help binary victims to recover their money without fees and those that are covered under vague circumstances and take traders money for their services.
Finra’s Senior Vice President of Investor Education Gerri Walsh said that traders might get anxious to get back at list some of the lost money.
“This can leave them vulnerable to follow-up frauds that add to existing losses with devastating financial consequences,” Walsh said.
FINRA Explained about Fraud Tactics
It is very important to know that traders who became victims of binary options fraud don’t believe third party companies or people that claim they know all about their binary options accounts. There are various types of scam tactics where scammers make high pressure calls over traders that have lost their money. Traders should be aware who they are talking with before they continue with further correspondence.
According to Finra, there were various situations where the caller claimed that he/she is representative of U.S. government agency.
“While there are many variations of these tactics, beware of any person or organization that claims to know about your binary options accounts and offers to help return money to you,” Walsh said.
Traders should also pay attention if they receive a call from a representative of IRS – The Internal Revenue Service. Finra has mentioned one case where fake IRS representative tried to assure one investor that he must pay a fee for certain indemnity letter. He made false claims and fabricated the whole story in order to threaten the investor and take the money from him. He has also threatened to excise a fine if investor doesn’t pay for indemnity letter.
Make Checkups Before You Lose Money Twice
Traders are suggested to be very careful so they don’t fall in follow-up scams. Before they start trading binary options traders should know if the company they plan to invest their money with is a designated contract market. All government agencies prefer and recommend that traders trade with regulated business organizations.
Traders can protect their investments by checking if the brokerage company is legitimate and they can contact Finra or send a complaint to FBI Internet Crime department.
If you feel that your money could be endangered, contact some of the government bodies that might help you solve your problem.