Avoid trading with unregistered binary options brokers! Consumers mostly in their 20s have got in trouble triggered by SNS
Local consumer affairs centers and the like across Japan have received more and more inquiries and complaints about binary options, mostly from people in their 20s. A binary option is a simple financial instrument which allows investors to speculate on whether the price of an asset will go up or down in the future, for example foreign exchange rate. Most of the troubles have been triggered by SNS. It is often the case that after being solicited by someone who got acquainted with through SNS, a consumer starts trading with an overseas broker without fully understanding risks, and gets in trouble (e.g. "My broker does not accept my request for money return").
Illustration: How a consumer gets in trouble
- An SNS acquaintance induces a consumer to start binary options trading, saying "It would make profit".
- When accepting to start trading,
- The acquaintance introduces a website for trading to the consumer.
- The consumer opens an account for trading binary options and credits some money to the account.
- Later, the consumer gets in trouble, for example, unable to withdraw money from the account.
After being told "I will tell you a sure way to make money," I credited 100,000 yen to a dedicated account. I cannot withdraw money.
I became acquainted with a person willing to tell a sure way to make money from binary options trading. The acquaintance asked me some questions: "How much money do you want to make," "Do you have a credit card," etc. I registered with a website for trading binary options as recommended. The person said, "The minimum purchase starts from 20,000 yen. Many people start from 100,000 yen purchase. If you credit 100,000 yen, you can get a bonus of 100,000 yen." Then I paid 100,000 yen with my credit card.
Later, I was told to join an SNS group and I did so. I had no idea how to contact the group members. Although I asked how to handle, nobody answered. I decided to withdraw money and read website rules, which stated "You cannot withdraw money unless you trade three times of purchase including bonuses." Feeling suspicious about it, I checked the website and found that the site was run by an unregistered overseas broker. I want to cancel the contract and get my money back.
(woman in her 20s)
Characteristics and problems
- The consumer is seeking to withdraw money from an unregistered overseas broker.
- Some brokers claim "It's easy to make money from binary options trading."
- Some consumers started trading without fully understanding risks.
Advice for consumers
- Avoid trading with any unregistered broker.
- Do not swallow sales pitch. If you cannot fully understand risks, do not start trading.
- In case of trouble or concern, consult your local consumer affairs center.