Scams are a reality in binary option trading. Indeed, there are not only good brokers, but some are real experts in deception. Beginning traders, who are in a hurry to earn money, are the main targets of these fraudulent brokers, who use intelligent means to trap them. So how can we escape these bad actors? Here are the essential points to consider:
Do not let yourself be tempted
The first thing to know about scam brokers is that they are marketing professionals. The offers they offer are practically the best on the net, especially with exponential gains, or even attractive bonuses. Their advertisements are simply convincing and if the trader is misinformed, he inevitably falls into the trap. Some brokers highlight lower risks, loss-return opportunities, but also easy-to-use platforms and a wide range of instruments. In order to access it, however, it is necessary to make a minimum first deposit, generally ranging from 50 to 200 €. An amount that, unfortunately, will be paid free of charge to the broker, which will never allow withdrawals of earnings. The first trick is not to let yourself be blindly seduced by this type of offer. Before you start, you should always do some research on the identity of the broker.
Beware of false testimonies!
Between official websites, blogs and forums, there are many research supports. And it is not uncommon for the information advanced on these portals not to be the same, which can sometimes create confusion for the trader. In fact, what you have to keep in mind is that scam brokers have their own tricks to recruit customers. Apart from advertising, they do not hesitate to use false testimonies in the forums, attesting that they are indeed a reliable broker. They create blogs that are supposedly specialized in trading binary options and use fictitious people to post positive comments on their publications. Even in the context of research, it is therefore necessary to remain vigilant with regard to the veracity of the information. Direct consultation with financial institutions remains the safest way.
Rely on broker regulation
To find a reliable online broker, it is necessary to check, first of all, its regulation on the market. The holding of a licence from financial control bodies is a guarantee of secure trading. These institutions impose strict rules and only grant recognition when these conditions are met. A regulated broker ensures, among other things, the security of data and guarantees transparent transactions. It is subject to regular financial audits and, when certain rules have not been respected, it is immediately sanctioned by the institution. To find these regulated brokers, you can consult our tests of regulated brokers, you can also go to their official website or, better still, directly with the financial authorities. The latter, including the AMF, FCA, CySEC, or NFA, generally hold lists of all regulated brokers on the relevant market.
Consult the AMF blacklist
The AMF (Autorité des Marchés Financiers) blacklist is the essential document to avoid fraudulent brokers. Updated quarterly, it includes the names of all high-risk online brokers in France. The AMF relies on various elements in drawing up this list and takes into account the testimonies of traders who have suffered injustices. Brokers who do not hold a licence or have carried out suspicious transactions are registered, making it easier for traders to avoid them. Note that not all brokers on the list are necessarily scammers. However, they do not meet the AMF’s requirements and trading with them involves certain risks. It is therefore more prudent not to adhere to them. This AMF blacklist is available directly on the AMF’s official website. We offer brokers such as OptionWeb or TopOption on our website that have all the approvals of the financial authorities.
Check the protection of funds
After finding a broker who seems serious, it is strongly advised to check a few more points, including the guarantees offered to traders. The protection of funds is an essential element to ensure good creditworthiness. In particular, a regulated broker must apply the principle of account segregation, which allows traders to keep their funds warm and to be able to withdraw them at any time. This is even if the brokerage company goes bankrupt.
Account segregation is, in effect, the investment of client funds in independent accounts. This is practically a prerequisite for a worry-free investment. The separation of accounts also certifies that the broker complies with market regulations. Some brokers, including those regulated by the FCA, also provide compensation in the event of insolvency. The compensation is covered by the Financial Services Compensation Scheme and amounts to £50,000.
Always keep evidence
One last advice to consider, but not the least, is to always keep a copy of your transactions. And this, even if it is a regulated broker. In the event of a dispute, this evidence makes it possible to have recourse to the competent supervisory institution. The latter will then take care of doing justice to the trader, depending on the situation. The procedures to be followed are generally explained on the organization’s official website. In the case of fraudulent brokers, however, filing a complaint can be difficult. These malicious brokers have taken various precautions and most of the time they are located in tax havens. So the only solution is to run away from them from the very beginning.