How thousands of Britons are at risk from ‘world’s biggest online scam’

| Author: Tony Imossi (Secretariat) | Filed under: General News
How thousands of Britons are at risk from ‘world’s biggest online scam’

Thousands of pensioners are at risk of losing their life savings in a rapidly growing financial scam that British authorities are powerless to clamp down on, The Independent can reveal.

Savers are investing their money in fraudulent online trading sites offering the promise of potentially huge payouts with little risk attached.

The majority of the complaints relate to companies that appear to be based overseas and are attracting increasing numbers of users, particularly pensioners, who say their investments are frozen if they try to withdraw their money.

The companies encourage investors to make apparently simple bets on whether shares or currencies will rise or fall in value. Many such “binary options trading platforms” are legitimate, but an increasing number are fraudulent.

Both types currently fall outside the control of financial regulators in the UK, meaning that people have little recourse to get their money back if they feel they’ve been scammed.

In the year to May 2016, the most recent for which figures are available, the National Fraud Intelligence Bureau (NFIB), which is part of the City of London Police, reported having received 305 reports of binary options scams, or 27 each month.

But one lawyer representing victims told The Independent that the true number is likely to be significantly higher – running into the thousands each year – as victims are frequently too embarrassed to come forward and admit to being conned. He described it as “possibly the biggest financial scam in the world”.

Elizabeth Ablett from Derbyshire said that she signed up to a platform caller Binary Uno in December 2016. The 70-year-old’s husband had died the previous year and she didn’t have a pension big enough to live on.

Ms Ablett said that she initially invested £200 with the company, but that individuals who described themselves to her as “brokers” convinced her to up her stakes, telling her she was trading on the performance of gold and stocks.

By the end of March, she said, she had invested a total equivalent to almost £40,000, nearly her entire life savings. The following month, she said, her online account balance was shown to have slipped to zero. She said that nobody at BinaryUno answered her calls.

“They basically had assured me that the money I invested could not be lost,” she told The Independent. She said that they had convinced her to keep paying in by promising to match some of her investments.

Later she said she was contacted by a representative who told her that she would only be paid out if she had trading revenues of at least £1.5m. “Now I realise just how stupid I was,” she said. “I have no money at all. I’m skint.”

The Australian Securities and Investments Commission and the British Columbia Securities Commission in Canada have both publicly called for caution when dealing with binary options trading platforms. Both specifically name Binary Uno.

Lawyers and personal finance experts speaking to The Independent said the Government was unable to regulate the market because the platforms – even the legitimate ones – were not controlled by the Financial Conduct Authority (FCA) watchdog.

Some binary options trading platforms are regulated by the UK’s Gambling Commission, but only if the firm has gambling equipment located in the country.

Source:  The Guardian

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