Friday, 11 March 2016

The Voice - Consumer's Voice

Is BigOption authentic?

Hello Consumer Voice! I came across this business called BigOption, their business is about how they can help you make money and be a millionaire. So I would like you to help with the Authenticity of their business?

BigOption is in the binary options trading business. They claim that if you join you can “Get up to maximum 85% profit” on your investment “in less than an hour”. Their web site describes binary options as “a financial opportunity that offers investors a fixed price and a fixed return. Binary Options are also known as fixed or Digital Options and are traded only on the internet.”

The concept is actually very simple. You select two commodities such as foreign currencies and you bet whether their relative value will increase or decrease. For instance, you might select the exchange rate between Euro and the US dollar. There are only two possibilities of what can happen, they say. The rate can go up or it can go down. You gamble on which you think will happen and you can win and make a profit, or lose and get nothing. Two options, so they call it binary. So far, so simple.

But let me ask you two questions. Firstly, if profits of 85% are possible why aren’t these people keeping this idea secret and making money for themselves? What do they gain from you joining their scheme?

Secondly, if such profits were really possible don’t you think banks would be doing it and earning this sort of money for themselves?

The answer is the same for both questions. These profits are NOT really possible. This company makes money from you joining. They are the ones making the huge profits, not you, not me and not the banks.

It’s simply impossible to make that sort of return. I found an interesting quote about binary options. Gordon Pape, writing in Forbes magazine said: "If people want to gamble, that’s their choice. But let’s not confuse that with investing. Binary options are a crapshoot, pure and simple."

Please don’t waste your money.

Must I answer silly questions?

I stand to be corrected if need be. I get very irritated when I walk into a bank to deposit money and I am asked a question which I think is stupid, Where did you get this money. I have been with the same bank for over six years but today they ask me where I get the money I am saving. Am sure this is the reason why you find some people keep large sums of money indoors causing money not to circulate. Is it correct for banks to be asking this question?

I know this is frustrating but this isn’t actually the fault of the bank. Banks in most countries are required by law to identify the source of significant quantities of money as part of the anti-terrorism and anti-money laundering rules. Our banks are covered by the regulations issued by Bank of Botswana that demand this information. They don’t have any choice.

However, I am skeptical. Surely a terrorist or crook is going to lie, that’s what people like that do all the time. They’re experts at lying. They’re not going to suddenly confess that they stole it or that it’s the profit from a drugs sale, are they? Even a moderately talented criminal will be able to forge documents suggesting that the money was legitimately obtained.

I also have to ask whether these regulations actually achieve anything. Much of the money victims in Botswana paid to Ponzi schemes, pyramid schemes and simple scams like Eurextrade, TVI Express and Three Link Connection was paid through legitimate banking systems. Did these questions help stop them stealing people’s money? No, they did not.

So the lesson is simple. Yes, the bank IS required to ask you and yes, you ARE required to answer. Truthfully. But be skeptical about whether they’re just wasting your time and theirs.

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