'No matter what I did I was losing': Alberta woman who lost $75K warns of binary options scam - Action News
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'No matter what I did I was losing': Alberta woman who lost $75K warns of binary options scam

An Alberta woman is warning others after she lost $75,000 in a binary options scam.

This type of investment fraud is duping more victims, Canadian Securities Administrators says

A keyboard is shown with the word Scam written where the Return key is.
An Alberta woman who lost $75,000 in a binary options scam said she is still too ashamed to tell her family what happened. (CBC)

An Alberta woman is warning others of investment frauds after losing $75,000 in a binary options scam.

Binary options involve betting on how an asset, such as a currency or stock, will perform within a fixed time frame, which is typically very short. When the time frame is up, the investor receives a predetermined payout or loses the entire amount.

Naomi, who spoke to CBC News on the condition her surname and location not be disclosed, found an ad for binary options onlinewhile looking up a sports event.

"I consider myself a fairly savvy, intelligent woman. And I don't know how to face, still, the concept of being so stupid," Naomi told the Calgary EyeopenerMonday.

There are no registered people or firms permitted to trade binary options in Canada.

Earlier this month, the Canadian Securities Administrators (CSA) called binary options a leading type of investment fraud and said the number of victims is on the rise. The CSA set up a new website to fight the scam.

In December, an Edmonton business owner who lost $300,000 in this type of investment fraud took his own life.

'Sounded quite plausible'

Naomi said the initial ad she saw featured a lady walking through a luxurious home explaining a new formula to generate income.

"I don't know why,but I was curious. I wanted to see what this was about so I sent in my information," she said.

Later, Naomi got a phone call from a man who asked about her interest in trading. He started to explain how things workand she said she wasn't interested.

Naomi received more phone calls and was given additional information about binary options.

"And after awhile it sounded quite plausible," she said.

Naomi said she researched the company presenting her with the offer, and found websites that claimed the company was legitimate.

Small investment to start

Her initial investment was just $250, but that number continued to grow.

"Basically it's almost like a hypnotic formula that's used with the premise that of course money makes money, and the more money that's invested, the bigger the outcome," she said.

Eventually, Naomi's binary options lost within the fixed time frame. Seconds later, they went back up again.

"At this point, no matter what I did I was losing," she said. Naomi began to feel nauseous, desperate and panicked.

The Canadian Securities Administrators said most binary options sites are rigged to lure in victims with small returns early on. Often no actual trading occurs. Instead, the entire interaction is set up for the purpose of stealing money.

Duped again

After her first loss, Naomi got a call from a company offering to get her money back, and was duped again.

"They were appalled at what had happened to me, and very sympathetic, righteous anger, and were determined to help me recoup my losses," she said.

"And so, believe it or not, I got duped again. It seems absolutely implausible for someone from the outside looking in."

Naomi said this scam puts a significant dent into what she had hoped to leave her children. She hasn't told her family what happened.

"I'm still deeply ashamed and still feel horribly humiliated," she said.

Naomi cautions other Albertans to talk to their bank before doing anything like this, rather than relying on information online.


With files from the Calgary Eyeopener