The Federal Financial Supervisory Authority (BaFin), an independent German regulatory institution, today warned investors against companies or persons that approach victims of binary options fraud claiming that, for a fee, they can help them recover the sums invested or the losses incurred on unlawfully operating trading platforms. The also red-flagged the activities of RichmondFG, a company that appears to be offering forex and CFDs in Germany without complying with its financial legislation.
The alert notes that scam artists buy and sell lists of previous victims so that they can call them promising to recover the money that they lost or profits they never received – for a fee in advance.
This type of activity is typical of the fraud mechanism known as a ‘. Although some government agencies could help people who have lost money, they don’t charge a fee, guarantee money back, or give special preference to anyone who files a formal complaint.
The regulator cautions investors that some of these offers may be fraudulent because it is often very difficult to track down the person or group that has scammed them.
Yet another unregulated broker
According to the , RichmondFG is not an authorized investment firm or credit institution in the country and is thus not allowed to provide banking or investment services in or from Germany.
In order to prevent such fraudulent practices, BaFin has issued several guidelines which encourage potential investors to be wary of promises of disproportionate returns. A guaranteed investment with a high return that considerably exceeds the market return is often too good to be true, it says.
BaFin has also advised the public to always verify the company’s identity (identity details, country of establishment, etc.) and to never trust a company if it cannot be clearly identified.
In its capacity of supervising the financial markets regarding compliance with the required rules and regulations, BaFin has issued a series of advisories in recent years, most recently when it announced more specifics about its retail forex and CFDs trading stance. The watchdog was focusing on brokers that do not provide .
BaFin operates as a watchdog for financial trading, securities and markets in Germany, overseeing a variety of assets and compliance issues for traders and consumers. Today’s warning is the latest initiative in its efforts to clamp down on companies engaging in fraudulent activities.
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