The Australian Competition and Consumer Commission (ACCC) published its latest report detailing scam activity in the Australian financial markets for 2016. Despite concerted efforts to police markets domestically, many scams have continued to do harm to investors, with binary options in particular resulting in investors losing in excess of $11.5 million.
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Overall, in 2016, the ACCC and Australia’s Cybercrime Online Reporting Network (ACORN) received a combined 200,000 reports regarding financial services scams. Binary options represented around one percent of these reports (879), and the results were particularly damaging; Australian investors have lost a collective $11.5 million through binary options scams.
The majority of these reported losses related to offers of investment opportunities in binary options or the opportunity to buy shares at lower than market rates. This phenomenon is hardly native to Australia, with multiple other jurisdictions clamping down on binary options over the past few years due to illicit operations, its high-risk nature, and a propensity for unregulated activity.
Additionally, phone based scams in Australia continued to be a popular medium for investors to lose money, rising 48 per cent to 69,467 reports in 2016 with losses totalling $24.9 million. This trend is likely to continue given an increased reliance on mobile trading and communications – indeed the figure has risen for several consecutive years.
According to the latest report from Finance Magnates Intelligence Department and Cpattern, binary options clients in Australia and New Zealand managed to spend more money funding their trading accounts in March 2017 than any other country, which highlights the region’s affinity with the instrument despite its vulnerability to scams.
