When Dealing With Fraudulent Brokers
Your First Course Of Action Is
Reversing Credit Card Charges
According to former employees of binary options companies, a defrauded customer’s first course of action should be to try to reverse the credit card transaction. Even the threat of a chargeback can sometimes get a customer their money back, Adam Nujidat, an ex-employee of a binary options firm in Ramat Gan, said.
“If the company goes above a certain percentage of chargebacks, they could have problems processing credit cards,” said Nujidat, who testified at January’s Knesset committee session, “so they prefer to just return a customer’s money. But not many binary options customers know that is even an option.”
If the company does not return your money, you should approach your credit card company or issuing bank and fill out the paperwork for a chargeback, citing fraud, misrepresentation and breach of contract as the reasons, former industry insiders said. (Israeli binary options salespeople routinely lie about their identity, location and financial experience.)
If negotiation fails, then do a chargeback
Mitch, a partner with the New York-based firm Wealth Recovery International, which helps binary options victims recover their funds in exchange for a percentage of the recovered loss, agreed that a victim’s first recourse should be to try as hard as possible to obtain a chargeback.
If you suspect you have been defrauded by a binary options company, said Mitch, you should at first try to negotiate with it directly. If, as is often the fraudulent firms’ initial response, they tell you to put in more money in to recover your lost investments, don’t do it, as you will likely never see that money again either. If the company refuses to refund your money, you will then at least have documentation to show your bank that you made a good-faith effort to recover your funds, he noted.
Mitch added that if you are able to ascertain the real location of the binary options firm that defrauded you, you should provide that information to the bank. Many binary options firms claim to be calling from England or Scotland. If you can show that they are actually in Israel, Cyprus or Bulgaria, it will bolster your case.
Chargeback FAQChargeback FAQOne British victim, who lost $35,000 to a Tel Aviv-based firm, hired a private detective to ascertain the company’s real address and owner. Then he wrote the following email: “Look, I smell the pungent fragrance of scam — unauthorized trades and operating from another country when I thought you are from UK. My contacts in Tel Aviv, by total coincidence, are very strong. You may soon be graced with a visit from me in December in Ramat-Gan.”
Report The Fraud To The Proper Authorities
The defrauded victim then provided the address of the company and the name of the company’s CEO, an Israeli citizen. His money was refunded promptly.
Another victim, from Finland, approached the Finnish Financial Supervisory Authority about his losses, asking it to request that the Israel Securities Authority launch an investigation. As soon as he informed the company that he had done so, he was offered a full refund.
Indeed, the Israel Securities Authority has lately been “flooded” with personal appeals from defrauded binary options victims asking the Israeli government regulator to help them get their money back. The Israel Securities Authority has said it will launch an investigation on behalf of defrauded clients if, and only if, it receives an official request from that client’s government financial regulator.
Israel’s State Control Committee is in the process of taking testimonies from victims of binary options fraud, specifically those who have complained to the Israeli police. If you were the victim of binary options fraud and complained to the police, the committee is interested in hearing what response the police offered, if any, to your complaint.
Source: The Times of Isreal
What is a Chargeback?
Get more information about chargebacks