MARKET Banc de binary european option: It’s not a pretty picture for Photo-Me as shares dive 26. CITY DIARY: What drove RBS’s highly-rated finance chief Ewen Stevenson to quit after just four years?
THE PRUDENT INVESTOR: My wife wanted a bigger kitchen, so I sold shares at the worst moment possible! Victims say they never gave away personal details, so have crooks got hold of TSB account passwords? I’ve had an offer on my dream home accepted but I’m having trouble selling my flat – what can I do to stop the deal falling through? As John Price lay in his hospital bed, his sleep would all too often be broken by his mobile phone ringing. The 69-year-old had been diagnosed with myeloma — a form of bone marrow cancer.
Exhausted and drowsy, John would instinctively reach for his phone thinking it might be a relative or friend. The salesman may not have known John was in hospital, but the cancer sufferer was urged to push more of his life savings into an investment known as binary options. Binary trading allows investors to bet on whether shares, currencies, or commodities such as oil or gold, will rise or fall over a certain period of time. Often customers forge a relationship with a personal broker — or ‘expert trader’ — who will place the bets for them. Like many savers, John, a retired tools salesmen from Rutland in the East Midlands, was sold on the promise of high returns when he was cold-called in January 2016.
It was only when he looked into making withdrawals that he started to be concerned. Having originally understood he could cash out at any time, he experimented by withdrawing small lump sums from his account. This succeeded but, trawling internet forums, he read posts from other binary options investors who had struggled to access their cash. So when a salesman called him on his sickbed this summer about another investment, he said no. He asked repeatedly to withdraw the remaining cash, telling staff he could not afford to lose any more money. 3,500 of John’s money was lost in a series of trades. I am not normally a naive person but they were so persuasive,’ he says.
Police say binary option trading is now one of the biggest fraud risks in the UK. This is just the tip of the iceberg,’ he says. Many binary trading firms are based abroad — often operating from Israel, according to British police. Although the firms are free to target British customers, they are not regulated by City watchdog the Financial Conduct Authority. This means savers have nowhere to turn if they wish to make a complaint.
Typically, investors are lured in by a marketing call or email. 250, they usually receive further emails and calls from staff who persuade them to invest more. This is precisely where savers start to lose control of their cash. Most are asked to sign forms that authorise the company to take money directly from their bank accounts. He begged the firm to return his cash, but was told it had already been traded and he could not access it at the time. At this point the story gets even more muddled. 150,000 — or 30 times the bonus amount that was covering his losses.