Losses from “binary options” trading have risen from £6,200 in 2012 to £27m last year, an increase of 400,000%.
An online investment scam targeting people through social media has seen the amount of money lost by victims in the UK rise by 400,000% in six years.
Figures from Action Fraud show the amount lost to “binary options” trading increased from £6,200 in 2012, to £27m in 2017 alone, with the total currently standing at £61m.
Binary options, or fixed odds betting, are being used by fraudsters as part of a multi-billion pound industry which is believed to be co-ordinated by overseas criminals.
A binary option is where you can gamble on an outcome, usually something to go up or down, with the pay-off being a fixed amount or nothing at all.
One example would be to bet on whether the value of gold will be above or below a certain price and investors believe they can gain high returns on little amounts.
Consumer group Which? has described binary options scamming as “Britain’s biggest investment con”, with illegitimate companies targeting victims through pop up adverts online and cold-calling.
Binary options trading is currently regulated by the Gambling Commission but from January 2018 the Financial Conduct Authority will take over.
In other countries however, such as Israel and Canada, it has been banned completely.