Following an investigation conducted by the Australian Securities and Investments Commission (ASIC), Apple and Google have been asked to remove “hundreds” of mobile trading apps from their respective app stores, which were determined to be responsible for scamming clients out of large sums of money, according to a report published by The Independent.
The ASIC’s review, which concluded and was published on Tuesday, largely focused on iOS and Android apps that specifically deal with so-called ‘binary options trading’; and the agency was able to identify upwards of 330 individual apps — some of which were offered through established financial institutions — that were unlicensed to offer these trading options in the first place. In its review, the ASIC cited particular concern over apps that “appeared to be misleading about the profitability of trading and the amount of profit that could be made,” “users could earn up to 90% in less than an hour,” or how “around 85% profitable signals from the top traders to guarantee the safe trading”.
What Is “Binary Options Trading”?
According to The Independent, binary options trading platforms “encourage investors to make simple bets on whether shares or currencies will rise or fall in value over time.” Interestingly, while several of these platforms, including some that are available on the app store, are indeed legitimate, the report cites an increasing number of fraudulent apps that have been sprouting up in countries like Australia, the U.K., and elsewhere in the world where government regulation is lower.
Unfortunately, since nearly all of these so-called binary options trading platforms are unregulated by any major financial governing bodies, those who decide to invest in them, and come to determine that they have been scammed, have little recourse insofar as getting their money back.
While more recent figures remain unavailable, as of May, 2016, the U.K.-based National Fraud Intelligence Bureau reported receiving as many as 305 individual reports of binary options trading scams. However a lawyer representing some of the victims, many of whom are senior citizens who were persuaded to invest lump-sum payments from their pension funds in these fraudulent platforms, mentions the actual number could be much higher since “victims are frequently too embarrassed to come forward and admit to being conned.”
“In an age where technology can hide who is offering and controlling a product, buyer beware has never been so important. If something appears too good to be true, it probably is.”