Unfortunately, many unregulated brokers are trying to convince European investors to register on their platforms. Here’s how to recognise them:
1. Your broker is not regulated. A regulatory licence is required to practice in Europe. It is therefore important to always check before committing yourself.
2. You were solicited by telephone. These brokers’ main technique is to solicit by phone. If a broker you’ve never heard of phones you and tries to persuade you to invest on their platform, it is best not to follow it up. It is probably a scam.
3. Your broker offers you a managed account. The second most common technique is the managed account. This is a trading account on which you deposit money and the brokers’ trader deals for you to make a profit. This is often a scam. The trick is to make you believe in regular earnings to induce you to deposit more. The day that you request a withdrawal of your earnings, they disappear with your money.
4. Your broker offers you a free trial of their platform using their own money. Here is the third scam technique. The broker usually offers to give you 200 or 500 euros in order to test the platform. The platform is then rigged so that you make a lot of money. Once you want to withdraw the money you are then asked to make a deposit, often very substantial, to release the money. Of course once the deposit is made you won’t hear from them again.
If your broker falls into one of these categories you can be 99% certain that it is a scam and that you will never see your money again or the earnings you have made. Your broker, however, will have won all round because he will take risks with your money and, if he succeeds, he will keep the earnings as well as your investment.
Why are so many brokers banned in Europe? The answer is simple; it only takes a few days to create a false binary options platform. So when a dishonest broker is spotted, with negative reviews for example, they just have to open a new site with a new name and a new broker, shiny and brand new, is born.