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21 Sep 2016

Thousands scammed out of their savings

Thousands of people in the UK are being scammed by fraudulent calls promising big returns from supposed investment opportunities, AOL Money reports.

According to the article, the police are dealing with a growing number of calls - more than a dozen each week - from people who have been scammed out of their money, with total amounts running into the hundreds of thousands. Reports suggest that some people have taken their own lives upon discovering that all their money had been taken.

These criminals are offering so-called binary options investments, whereby bets are taken on how shares, currencies or commodities will increase or decrease over a certain period.

The publication also refers to an investigation conducted by the Bureau of Investigative Journalism and the Daily Mail, which found that call centres in Israel and Romania are being used to trick potential investors. Indeed, one whistleblower from a such a facility in Israel informed reporters that he and his colleagues had been instructed to “rape the clients financially.”

Victims were asked to hand over an initial investment of £250, after which they are told that their investment is making money. They are then encouraged to invest more, but soon discover that their money has disappeared. The study suggested that the average victim lost £16,000, which for many people was their pension savings.

Pensioners are the key targets for these scammers, but they are also using social media to attract more young victims. According to the National Fraud Investment Intelligence Bureaux (NFIB), around a third of victims are under the age of 30, while 9% are just teenagers.

Binary options investments are not currently regulated by the Financial Conduct Authority (FCA), meaning there is no solution for those who have lost their money.

Commenting on the issue, the FCA stated: “Unfortunately many of the reports we have received are from consumers who have dealt with fraudulent binary options firms that have no regulatory status either with the FCA, Gambling Commission or other EEA or non-EEA regulators.”

The group expressed particular concern about the reported experiences of consumers dealing with unlicensed and/or unauthorised binary options firms, noting: “We regularly hear about such firms suddenly closing consumers´ trading accounts, refusing to pay back their funds and ceasing any further contact with the consumer.”

The FCA advised any person looking to invest in binary options, to use a firm licensed with the Gambling Commission or with overseas firms who are subject to similar regulation.

Copyright M2 Bespoke 2016

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