Consumer Fraud Week – believe it or not – in Australia, and the country’s financial regulator, ASIC, has highlighted the high level of complaints in 2016 by Australian consumers, particularly about investment scams. In particular, data published by the Australian Competition and Consumer Commission (ACCC) demonstrates that scammers are particularly keen on online fraud.
ASIC itself reported A$11.6 million was defrauded through cold calling binary options scams last year. It remains critical that prior to parting with any money, investors establish the bona fides of any broker they are dealing with. Many traders and investors are not doing their homework, and not double checking if a firm is legitimate, or is registered to transact financial business in their home jurisdiction.
Social media platforms in particular are becoming a favoured medium for approaching potential victims, ASIC says.
“It is important not to let anyone pressure you into making decisions about your money or investments and to invest in something you don’t understand,” explains Peter Kell, Deputy Chairman of ASIC. “Get a second opinion from licensed financial advisers. And if you think you’ve been scammed, contact your financial institution immediately.”
Binary options currently make up about 1% of the financial scams in Australia. It is a similar issue for other markets. Many reputable brokers have started to distance themselves from binary options, and indeed, several EU countries have now started to crack down on the promotion of binary trading in consumer media.
Binary options remain particularly popular in Australia and New Zealand however, which contributed more money to binary options trading accounts than any other countries in March of this year.
The actual scale of the increase in scam activity is probably most worrying, up 47% last year compared with 2015. The over 65 age group reported the highest levels of financial loss.
The ACCC is actively working to alert consumers to the potential for online trading scams, for example by sending over 2000 letters to potential scam victims in 2016, and working with financial institutions, phone companies and social networks to implement better scam prevention systems.