Pan-Canadian financial regulator Canadian Securities Administrators (CSA) has issued its 2017 annual report, highlighting the CSA’s ongoing fight against Binary Options scams targeting Canadian consumers.
The CSA comprises a council of securities regulators of Canada’s 10 provinces and three territories. It coordinates and harmonizes regulation for the Canadian capital markets.
The CSA devoted an entire section of its annual report to Binary Options fraud.
According to the CSA, across Canada securities regulators have noted an alarming increase in reports of Binary Options fraud. A handful of reports in 2014 became dozens in 2015, and hundreds in 2016, with estimated losses growing from thousands into millions.
With the number of victims adding up, enforcement specialists from across the CSA quickly formed a Binary Options committee in the summer of 2015 to discuss how to curb – if not put a stop to – these financial scams. By 2016, the problem warranted more time and attention, and the committee officially became the CSA’s Binary Options Task Force.
The Task Force identified a variety of strategies to stop Binary Options fraud in Canada. One initiative involves working with credit card companies and banks to suspend transactions and transfers with companies suspected of conducting unregistered Binary Options trading with Canadians.
Another initiative focuses on advertising – working with online advertisers and social media giants to ban binary options ads targeting Canadians. Another component is education – getting the message to Canadians that Binary Options are not worth the risk.
For that, the CSA formed a Binary Options working group comprised of communications and enforcement experts from jurisdictions across Canada, to identify and develop a campaign that would raise awareness of the risks of trading in Binary Options.
On March 2, kicking off Fraud Prevention Month, the CSA launched binaryoptionsfraud.ca – an online platform to educate Canadians on the risks associated with Binary Options trading. CSA spokespeople Frédéric Pérodeau with the Autorité des marchés financiers (AMF), Jake van der Laan of the Financial and Consumer Services Commission of New Brunswick (FCNB), and Jason Roy of The Manitoba Securities Commission (MSC) spoke to media across Canada, describing how these frauds have cost many Canadians their life savings, their homes, their retirement, and more.
The key message for Canadians: “It’s not worth the risk.”
To highlight the pervasiveness of the problem, we had reported last year that Jason Roy himself – one of the members of the CSA’s binary options task force – had received a cold-call pitch from one of the Binary Options brokerage firms.
The campaign also spread to discussion on Twitter through @CSA_News and other jurisdiction’s accounts. Ads on social media and through Search Engine Marketing (SEM) cleverly targeted the same individuals through the same type of ads that Binary Options fraudsters regularly use.
The marketing communications campaign was very successful, with coverage from more than 500 national and international outlets, 10,000 visits to the site, and 160 million advertising impressions, with further reach extending into fiscal year 2017/18.
The CSA’s full annual report can be seen here (pdf).