Investment scam fleeces thousands of their savings

Fraudsters ordered to 'rape the clients' financially

scam computer keys showing...

Thousands of British people including the elderly have been scammed by fraudsters promising big returns from so-called binary options investments.

The police are receiving more than a dozen complaints a week, with people having lost amounts running into hundreds of thousands of pounds. Some are reported to have committed suicide after realising their money was gone.

Binary options investment involves betting on whether shares, currencies or commodities will rise or fall over a given period - a risky gamble at the best of times.

According to an investigation by the Bureau of Investigative Journalism and the Daily Mail, call centres in Israel and Romania are lying to potential investors to lure them in. One whistleblower at a call centre in Israel told investigators that staff had been ordered to 'rape the clients' financially.

After handing over an initial £250, victims are told that their investment is growing, and encouraged to put in more money - only to discover that their 'investment' is gone for good. The average victim is believed to have lost £16,000, with many having cashed in their pensions to raise the cash.

As well as targeting pensioners, the scammers are also using social media to attract younger people, with the National Fraud Investment Intelligence Bureaux (NFIB) saying that a third of victims are aged under 30 and 9% are still in their teens.

And because binary options investments aren't currently regulated by the Financial Conduct Authority (FCA), there's no comeback for those that lose all their money.

"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. Most consumers describe having lost substantial sums of money," the FCA says.

"While this might be expected given the high risk win or lose nature of the activity, we are particularly concerned about the experiences many consumers report to us when trying to deal with unauthorised or unlicensed binary options firms. 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 says that anyone determined to invest in binary options should do so through a UK firm licensed with the Gambling Commission, or with overseas firms that are also subject to regulation.

It believes it should be able to regulate the sector itself, but so far has not been given the power to do so.

Victims of scams and fraud

Victims of scams and fraud