This tale is about my introduction to Binary Options, and how I got scammed. My goal is to deter you from pursuing this option, pun intended, of making money. There are far better ways to make money than Binary Options. Read on and I’ll let you be the judge!
As the name implies, it is a means of making money involving Options. Simply explained, an option is the right to buy or sell a stock, at a specific price with a specific time limit. To have this right, a premium is paid for a lot consisting of 100 stocks.
You can learn more about Options from this well-known financial investment company called Charles Schawb. I will explain what Binary Options Trading is.
Binary Option Trading
The value of Options, just like Stocks, goes up and down until the day it expires worthless. Binary Options trading is like making a bet that the value of an Option will rise or fall over a specific time period. The time can range from 1 minute to a week or
more, before the expiry date naturally.
Each Binary Option gives a fixed payout if you bet correctly. The value of the bet as well as the payout is predetermined. If
you win, you get back your initial outlay and the payout. If your bet is wrong, you lose the what you paid for the bet. Although this appears like gambling, it is deemed legal. The answer to the question above, it is legit.
Sounds simple, right? The concept most certainly is. Is it easy to win? Far from it. From my experience the odds are worse than tossing a coin! This is where scammers come in. They persuade you that if you know what you are doing, it is possible to make more money than any other form of investing.
I’d like to tell you a cautionary tale where I got scammed. So beware
How I Got Entrapped In A Scam
This scam, like most of them, appeals to those who can least afford to lose money. I had accumulated a lot of high interest debts and was suffering from monthly payment schedules that hurt our budget. I needed a way to pay these off quickly. It was hard to save money to do that, since I was retired and on a fixed income.
During this time of worry, I got a phone call from a lady who asked me if I wanted to earn some money quickly through Binary Options. The company was called Ask Option and they were headquartered in the UK. How timely was that?
When I balked, she gave me many reasons why this was legal and not a scam. She got my attention. My defenses were weakened. But I had something urgent to do. I asked her to call me back the next day.
This was my first mistake. I should have hung up and blocked her number
She did call me back and gave me a primer on Binary Options. I already knew what trading regular Options were like. But this was different.
Being the risk taker I am, I liked the concept of making bets like this, She suggested I try it out with $1000 and watch my investment double within a couple of weeks. The broker would make my initial bet. She even said, that if it lost, they would pay me back my initial investment.
This was my first red flag. I was so desperate I was willing to risk $1000 to see how this played out.
You can guess what happened. I went for it using a credit card. What do you know, my $1000 had increased to $2000 within two weeks. I had an account online and I could see exactly how they did it.
They made several small bets of $200 or less, one at a time. The payouts were from $100 to $250. And the duration of most of the bets was one hour. I could watch the trade play itself out in real time. And see my account grow.
This was actually very exciting. Especially at the end of 60 seconds drew near, the value would rise and fall. Then right at the last moment the trade would win or lose. Most of these trades (sounds better than bets) went in my favor. I was ahead by $1000 in just two weeks! 100% GAIN!
This was my second red flag! Was this real? I asked to make a withdrawal of $1000. They approved it. Within a few days $1000 was deposited back to my credit card.
I was hooked. My thinking was after that I could play with the house money. Sounds like a good plan. Right? So far, no harm, no foul.
The Next Phase
In retrospect I feel that all of this was orchestrated for one purpose and one alone. To manipulate me into lowering my guard. And to earn my trust.
The fact that I got my money back and I was not being pressured made me feel they were a legitimate operation. Since I grew up in the UK I felt secure. In order to save me making International calls they had a phone number in the US that linked back to their UK office.
The Account Manager
Some bigwig at Ask Option told me that they were going to assign an Account Manager to assist me. He called me once to introduce himself to me. I told him I would like help in making more investments with the $1000 balance in my account. That would be possible and he would get back to me soon to discuss some trades.
He kept me waiting. After several days had passed, I decided to make some small trades by myself. I was successful in adding some small profits to my account. But I was afraid to go any further.
After several weeks had passed, I called Ask Option to find out what was happening with my account manager? They apologized and said he had left the company. A new account manager would be assigned to me.
The New Account Manager
He had an African accent and was oh so nice. He profusely apologized for the other managers neglect. He promised that he would work with me to make as much money as possible.
For the next few days he made trades for me and I noticed my account growing rather fast. Then it stopped.
My account manager called me and said that technically he shouldn’t be trading for me since that service was reserved for those who opened accounts with $25,000 or more. I didn’t have that kind of money and told him so. That was when he suggested that others in my situation got a loan and deposited the proceeds into their Ask Option trading account. After a few weeks they were able to pay off that loan with their profits.
I tried to get a loan and failed. My credit was bad. My account manager called me every day for a “friendly” chat. The main purpose was to find out how I was doing in getting a loan. When I mentioned that I could not qualify, he recommended approaching one those high interest places like he had heard other clients do. And they got their money the next day.
But if I could not get a loan that was OK. I could continue trading by myself using my small account that had grown again to $2500. This time I was more interested in growing this further rather than making withdrawals.
Greed Raises Its Ugly Head!
I couldn’t qualify for a $25k loan, but one company, Lending Club who is really big in making creative loans, agreed to lend me $18K.
When I got a call from my buddy the account manager, he was encouraged. And asked me to see if I could somehow find the remaining $7K. He would call me back the next day to see how I was doing. Since he didn’t pressure me to get that $18K loan and deposit that into my account, I felt food that they cared about me.
When I got the call the next day, I once again told my manager I didn’t have the $25K. Time was marching on if I couldn’t come up with the money, it would take a much longer time for me to build up my account trading by myself.
At this point he proposed something that I thought was remarkable. He liked me as a person and could see how much I needed the money to become debt free he was going to do me a favor. He was going to ask the company to loan me $25K and give me a matching bonus of $25K so that I would have $50K in my account to invest with. With that amount he would be happy to make trades for me and see my balance soar.
Red Flag #3. There was a catch. Until I paid back the loan with a cash transfer from me to Ask Option for $25K I could not make any withdrawals. But once I paid up the loan, I would have total access to my account and could make withdrawals freely. All I had to do was to sign an agreement they would send me to that effect and the deposits would be made into my account.
Greed had overtaken reason in me and I agreed without thinking this through. The next day when I checked my account, the balance had increased from $2500.00 to $52500.00! Yikes, was this really happening?
My buddy was making trades for me, Each day I saw my account grow by several thousands of dollars. Pretty soon it had reached over $152K. I was itching to get my hands on that cash!!
By now like clockwork I would be getting a daily phone call from my account manager. I began to think he was my hero! I thanked him for his trading brilliance. And he kept asking me how was I am getting on in coming up with the $25K to pay off the loan.
Red flag #4. I asked why couldn’t I use the money in my account to pay off the loan. He kept telling me that is all my money. His stock answer was it didn’t work like that. I had signed the agreement to pay off that loan with a money transfer first before I had access to that money.
I cashed my IRA and other savings to add to the $18K that I could borrow. But I was still $2K short. My account manager told me since I was such a good customer, if I could send $23K he would come up with the rest trim his commissions. That was the least he could do for me.
I could hardly wait to get the loan and cash out $5K from my IRA to come up with $23K.
I got the money. When I went to the bank to execute a wire transfer, they gave me a form to fill out where I had to answer a question that I knew the people I was sending this money to. I was warned there were scams going around. And they wanted to make sure I was not being scammed. Of course, I told them this was for an investment that had already paid me back handsomely.
In an instant the money was sent. I confirmed with my Account Manager that they had received the money. He confirmed they had. When I asked him when was he going to deposit the $2K into my account to make up the $265K. He told me he was going to talk to his manager about that that very day.
Panic At The Disco
It was at that moment I got an uneasy feeling in my gut. How come he hadn’t already got his deposit into my account approved? Like I said before, my greed was so overwhelming I was blind to what was really happening. Was I being scammed?
No it can’t be. I kept looking at my Ask Option account balance to make me feel good again. I got a call from another person and my heart sank.
Yet Another Account Manager
I was assigned another account manager as my previous one had to return to Africa for a family emergency. His father had died. I asked the new manager did my previous manager make that $2K deposit into my account to help me meet my contract of paying back the $25K loan from Ask Option?
He checked and said it was not deposited. But he would contact my previous manager to make arrangements for that deposit.
I pleaded that I needed to make a withdrawal. So it was important that deposit was made.
Thank God that deposit was finally made. Now I could make that withdrawal I desperately needed. I asked id I could make a $50K withdrawal trim my account that was now at $176K. Yes of course, I was told. All I had to do was to go into my account online and fill out a withdrawal request for $50K which I did as shown below. It would be sent for approval. Once approved, a wire transfer would be made to my account in 5 business days.
Time For Celebration!
There it was. I saw my request for $50K approved. Soon I would have my hands on some real money.
A week passed and nothing happened. My new account manager became difficult to get hold off. So I called the UK office directly and spoke to one of the executives there. He told me not to worry, the transfer is being processed and I would get my money soon.
Weeks went to months. And nothing. My calls were not being taken.
Time For Dejection
By now it became clear to me that something was not right. I got a lawyer to send them a letter. They responded that they had sent me the money and I should have received it.
My bank had no record of any wire transfer. When my lawyers sent them another letter, they responded that there was nothing more they could do as the matter was closed.
The strange thing was when I checked my account online, it showed that the $50K transfer was still pending. What was going on? Since they were located in the UK I would have to enlist the help of lawyers there to sue them, But I had no money to do that.
My Ask Option account now stood at $181K. And it was stuck at that level. Was that money really mine?
The Sad Truth
When I researched Binary Option Scams, I discovered that the center for these operations was in Israel. These companies were thieves. They used all kinds of deception including using false foreign countries to assign their fake headquarters.
Also, the Israeli Government was doing everything in their power to close these companies down.
I contacted a Law Firm in Israel who specialized in fighting these Binary Option companies. They were swamped with cases. They would be happy to take my case. They charged a 30% flat fee based on my real investment. In my case I had invested $23K. They said they would charge me $6K which was a discount. I would have to pay $3K up front. And $3K after they recovered my $23K would be taken out of that amount. If they failed, then I would not owe them the balance. So I would only be out-of-pocket $3K.
They also added that if Ask Option closed their operations down, then there was nothing they could do.
Since I was really strapped for cash, I couldn’t come up with another $3K. And with the possibility of Ask Option closing down, I could lose it all.
Don’t Put Good Money After Bad
Have you heard this term? I felt it was not worth pursuing this recovery. One day I discovered that the Ask Option website was no more. And their phone number was not functioning. This sounded like curtains.
The only silver lining was I could write off this investment loss on my tax returns. I was now saddled with a $18K loan monthly repayment I could not afford. My plan was to have paid this off with the profits.
My 2nd Best Move Last Year – Loan Repayment At A Discount
I couldn’t declare bankruptcy because I had already done that a few years earlier. I did the next best thing. I defaulted on all my loans. Then contracted with a debt renegotiating company to help me pay back these loans at a discount.
This was my second best move in the past year. I will tell you about my 1st best move in a little while.
I found a highly rated loan renegotiation company who prepared a plan for me. They would halve all my outstanding debts and negotiate a repayment plan with my creditors where no additional interest would be tacked on.
With this plan, I would be debt free in four years. And they would take their fee at the end. We set up an escrow account where I make one payment each month and they tale care of the rest.
My 1st Best Move Last Year – Joined Wealthy Affiliate
My 1st best move was to take action towards clearing up my debts.
My 1st best action was to come up with a plan to use the Internet to earn money. And I did! I discovered Wealthy Affiliate who is currently training me in creating an Affiliate Marketing business online, For less than $1 a DAY!
I now have peace of mind knowing that I am in control of my financial future., With debts under control, I am now taking income generation under my control.
Passive Income Asset
My goal is to build an Affiliate Marketing website that will help me generate a passive income over time. This website you are on now is part of this plan. Why don’t you check out some other Blog Posts here?
I wrote about Affiliate Marketing for those who need to know more:
Wealthy Affiliate has become a huge part of my life now. You can either click the banner below and join for FREE! No credit card required. When you join us I will see you on the other side and be your mentor. Only if you would like me to:
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Be careful about being scammed. When you see an offer too good to be true, do your research. You may think that Wealthy Affiliate is too good to be true too. I urge you to do your research. What better way to do that than to join for free and kick the tires as it were. You can remain a free member as long as you like. The graphic below shows the great value you get as a free member and the awesome value available to you as a paid Premium Member. I hope you find this Blog Post helpful. I am here at your service.