Peter H.

Binary Options Follow-Up Schemes: Dont Lose Money Twice
Recovery Scams and IRS Impersonation Scams Are Common Cons

WASHINGTON The Financial Industry Regulatory Authority (FINRA) today issued an Investor Alert warning anyone involved in binary options trading through unregistered non-U.S. Companies to be on guard for a one-two punch: losses followed up by potentially fraudulent pitches to help recoup those losses. Ploys include recovery scams and IRS impersonation scams.

Binary options are inherently risky all-or-nothing propositions. When a binary option expires, it either makes a pre-specified amount of money, or nothing at all, in which case the investor loses his or her entire investment.

Consumers using unregistered non-U.S. Trading platforms or services may be particularly vulnerable to follow-up scams.

Following a significant loss, investors may be anxious to get back at least some of their money, said Gerri Walsh, FINRAs Senior Vice President of Investor Education. This can leave them vulnerable to follow-up frauds that add to existing losses with devastating financial consequences.

In most cases, customers of binary options platforms hear from individuals who appear to know about their accounts and claim to be able to help them get back lost funds, provided the customers pay an advance fee. Be wary of tactics such as:

Urgent correspondence and high-pressure calls that specifically refer to your binary options accounts;
Claims that the caller is with, or acting at the behest of, U.S. government agencies; and
Subsequent correspondence with official-looking documents that make it look as if money is available, and can be recovered for a fee.

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.