Unregulated Brokers and Regulated Banks: Partners in Crime?
It’s no secret that the internet is awash in investment scams. For the past decade the most onerous of them have been unregulated binary options brokerages.
Binary options are binary because you have only two options. Either the value of an underlying asset will go up during a defined period of time or it will go down. It’s your bet. If you’re right, you win. If you’re wrong, you lose.
The problem with all of those online binary options sites was that no one ever won. Once the operator saw that you had stopped pouring money down the hole they pulled the plug and emptied your account, or froze it, or froze you out of it, or refused to allow you to withdraw whatever was left due to some esoteric reason hidden in the fine print on their Terms and Conditions page.
So what could you do? For many victims, their first stop was the bank that issued them the credit card they used to transfer their money to the scammer. Inevitably, however, these banks would refuse to help. Rather than raise a dispute – the first step towards obtaining a chargeback – banks would refuse on the grounds that money paid to open an account on a binary options site was an investment. And investments that fail, of course, are not recoverable through a chargeback.
There are two problems with this type of response from the bank. The first is that online binary options sites are typically not licensed to operate as such by the national financial regulator in the same country in which the complainant resides. That’s illegal. That is easy enough to determine, since each country’s regulator publishes a list of such offenders. Banks have an obligation not to transfer of money to illegal entities.
Secondly, these binary options sites are not plugged in to any legitimate exchange. They can’t be since they are unlicensed to do so. That’s what makes them scams. While they feature online “trading platforms,” it’s all smoke and windows meant to deceive victims. They mislead their clients into signing up for investment services they cannot possibly provide. In such circumstances, a service-related chargeback is indeed allowed by every charge card company.
So why do banks make such mistakes?
Here are three common reasons:
- As remarkable as it may seem, while the charge card companies may presume that bank dispute department staffs actually read a thousand pages or more of their rules and regulations, they have no way to force them to do so. They do not administer tests or provide certification of competency. Nor do the banks!
- Legitimate merchants are often hit by what are called “friendly chargebacks.” These are cases in which unprincipled consumers attempt to get money back for goods or services that truly were supplied as contracted. Many bank dispute departments, therefore, are naturally inclined to be skeptical and assume that every chargeback request ought to be declined right from the start.
- Finally, there are banks that don’t care what the charge card guidelines say. They don’t give a hoot about their customers or the charge card companies whose cards they distribute.
Whatever the reason may be, Forex and Binary scam brokers know that the odds are that banks cavalierly dismiss chargeback requests filed by their victims. In that way, banks are helping perpetuate online fraud.
MyChargeBack.com is owned and operated by Cactil LLC, an American dispute resolution consultancy firm headquartered in New York with a global focus and an international client base throughout North and South America, Europe, Africa, Asia, and Oceania.
The MyChargeBack team, which has recovered more than $10 million in funds for its clients to date, is comprised of professionals with extensive financial, legal and regulatory backgrounds who assist victims of binary option scams retrieve their money.
MyChargeBack is able to accomplish that because it knows how chargebacks work and how to ensure that each client’s case will be presented effectively to the bank. Contact us today for a free consultation. File a complaint today at: https://mychargeback.com/binary-options/