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August 2, 2017

Apple and Google ditch shady trading apps with Australia’s help

by John_A

It’s no secret that Google and even Apple have an abundance of sketchy applications on their app stores. Some of those called binary options trading apps have alarmed the Australian Securities & Investments Commission (ASIC) so much that it helped the tech titans remove over 330 of them. According to Bloomberg, the regulator staged an intervention after getting numerous cases of fraud filed against the apps’ operators, who turned out to be unlicensed. ASIC said it managed to get Apple to remove the fraudulent apps from its stores worldwide, but it didn’t specify whether Google deleted them from the Australian store only.

Binary options are also called all-or-nothing options, because they’re based on a simply yes or no question. Here’s an example: at 1 PM sharp, the app gives you a chance to bet $50 on whether the stock of a particular company goes up or down by 1:30 PM. If you placed your bet on the stock going up, and it actually does, you get your $50 back and win another $50. But if the stock goes down by 1:30 PM, you lose your bet instead.

Back in 2010, Forbes warned people that binary options trading is pretty much online gambling, and that regulators are bound to get a hold of them. Today, though, the problem isn’t the options’ nature, it’s the growing number of fraudulent operators. In March 2017, the FBI issued a warning about binary trading. Apparently, the bureau received hundreds of complaints worth millions of dollars from binary fraud victims in 2016 alone.

All the fraudulent activities revolving around binary trading are becoming such a huge problem that ASIC had to intervene. Besides, the regulator was also concerned about how the apps were advertised as sort of a “get-rich-quick” scheme. “Earn up to 90% in less than an hour,” one advertisement reads, “in fact you can profit quickly as 60 seconds and profit as much as 620 percent via one trade.” The commission pointed out, as well, that most of the apps had no risk warning. Some didn’t even allow people to withdraw their winnings, while others were merely collecting personal information.

Commission Cathie Armour tool the chance to remind people to be vigilant:

“This is a timely reminder for investors to remain vigilant and not fall for flashy advertising or hard selling. Investors also need to make sure any financial service provider, regardless of the way that financial service is being provided, is adequately licensed and authorised to provide those services.

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.”

Source: Bloomberg, ASIC

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