IRS imposters trying to scam money from Binary Options traders: FINRA


Share

The Financial Industry Regulatory Authority (FINRA) today issued an Investor Alert warning anyone involved in binary options trading through unregistered non-U.S. companies to be on guard for a one-two punch: losses followed up by potentially fraudulent pitches to help recoup those losses. Ploys include recovery scams and IRS impersonation scams.

Binary options are inherently risky all-or-nothing propositions. When a binary option expires, it either makes a pre-specified amount of money, or nothing at all, in which case the investor loses his or her entire investment.

Consumers using unregistered non-U.S. trading platforms or services may be particularly vulnerable to follow-up scams.

Gerri Walsh, FINRA

Gerri Walsh, FINRA’s Senior Vice President of Investor Education, commented:

Following a significant loss, investors may be anxious to get back at least some of their money. This can leave them vulnerable to follow-up frauds that add to existing losses with devastating financial consequences.

FINRA warned that in most cases, customers of binary options platforms hear from individuals who appear to know about their accounts and claim to be able to help them get back lost funds, provided the customers pay an advance fee. Be wary of tactics such as:

  • urgent correspondence and high-pressure calls that specifically refer to your binary options accounts;
  • claims that the caller is with, or acting at the behest of, U.S. government agencies; and
  • subsequent correspondence with official-looking documents that make it look as if money is available, and can be recovered for a fee.

While there are many variations of these tactics, beware of any person or organization that claims to know about your binary options accounts and offers to help return money to you,” Walsh added.

Another scam involves phone calls purportedly from an IRS representative. In its most basic form, the IRS imposter claims that you owe money in taxes because of your binary options trading, and may threaten to bring in police or other government agencies if you do not pay up immediately. The IRS imposter asks for your debit or credit card number, or may pressure you to pay with a prepaid debit card. As the IRS makes clear, it never calls taxpayers and demands that they wire or send money — instead the IRS sends a written notification of any tax due through the U.S. mail.

There can be twists to the standard IRS impersonator scam. In one instance, an investor who called FINRA described speaking with a man who identified himself as “a representative from the IRS” and told her she must pay a fee for an “indemnity letter.” He claimed the indemnity letter was required because the financial institution she was dealing with in conjunction with her binary options account was not registered with the Securities and Exchange Commission. While it was true the financial institution was not registered with the SEC, the caller completely fabricated the need for such a letter. He further threatened that if the investor didn’t pay for the indemnity letter, the IRS would levy a heavy fine.

Follow-up scams tend to result from investors who may be unwittingly involved in “shady” binary options businesses. Before getting involved in binary options trading — and before sending any money, consumers should do the following.

Check the U.S. Commodity Futures Trading Commission (CFTC) website to see if the binary options trading platform is a designated contract market. If it is not registered, do not do business with the organization or individuals associated with it.

Check the U.S. Securities and Exchange Commission (SEC) EDGAR system to see if the binary options trading platform has registered the offer and sale of the product with the SEC.

Check the SEC’s website regarding exchanges to determine if the binary options trading platform is registered as an exchange.

Check FINRA BrokerCheck® and the National Futures Association’s Background Affiliation Status Information Center (BASIC) to determine the registration status and background of any firm or financial professional that you are considering.

Related News

  • Really an ‘investor’ shouldn’t be dealing with a binary options firm in the first place. They are just asking to be ripped off.

arrow

IRS imposters trying to scam money from Binary Options traders: FINRA

5

Send this to a friend

Signup for LeapRate's Email Newsletter
Interested In Forex Industry News & Information?

Subscribe FREE To Our Industry Leading Email Newsletter:

  • Trading Industry News To Your Inbox
  • Breaking News Briefs
  • Executive Moves
  • Broker, Platform and Vendor Updates
  • Financial Results
  • FX Volume Reports
  • Exclusive Commentary
PGlmcmFtZSBzcmM9Ii93cC1jb250ZW50L2E0bHIvaGFuMTZyZXNfNjI1eDQwMC5odG1sIiB3aWR0aD0iNjI1IiBoZWlnaHQ9IjQwMCIgZnJhbWVib3JkZXI9IjAiIHN0eWxlPSJib3JkZXI6bm9uZTsiIHNlYW1sZXNzPjwvaWZyYW1lPg==
PElGUkFNRSBTUkM9Imh0dHBzOi8vYWQuZG91YmxlY2xpY2submV0L2RkbS9hZGkvTjgwMTcuMTkxNDQzMkxFQVBSQVRFL0IxMDY0ODE4OS4xNDIxOTAzNjE7c3o9NjAweDQyNTtvcmQ9W3RpbWVzdGFtcF07ZGNfbGF0PTtkY19yZGlkPTt0YWdfZm9yX2NoaWxkX2RpcmVjdGVkX3RyZWF0bWVudD0/IiBXSURUSD02MDAgSEVJR0hUPTQyNSBNQVJHSU5XSURUSD0wIE1BUkdJTkhFSUdIVD0wIEhTUEFDRT0wIFZTUEFDRT0wIEZSQU1FQk9SREVSPTAgU0NST0xMSU5HPW5vIEJPUkRFUkNPTE9SPScjMDAwMDAwJz4=



PLEASE SEND INFORMATION ON PLACING A LISTING IN THE FOREX YELLOW PAGES DIRECTORY

I'M INTERESTED IN ADDING A COMPANY
PGlmcmFtZSBzcmM9Imh0dHBzOi8vd3d3LmxtYXguY29tL2Fkcy82MDB4NDI1LWxlYXByYXRlLWJyb2tlcnMiIGZyYW1lYm9yZGVyPSIwIiB3aWR0aD0iNjAwIiBoZWlnaHQ9NDI1Ij48L2lmcmFtZT4=
PGlmcmFtZSBzcmM9Imh0dHBzOi8vd3d3LmxlYXByYXRlLmNvbS9hNGxyMTcvdWZ4L3BvcHVwLzYwMHg0MjRfTU8tMjM3MDUtTWFzc0luc2lnaHRzLmh0bWwiIGZyYW1lYm9yZGVyPSIwIiB3aWR0aD0iNjAwIiBoZWlnaHQ9NDI1Ij48L2lmcmFtZT4=