Belgian Financial Regulator Warns of Soaring Scams: Pyramid Schemes, Binary Options, and Boiler Rooms
In a troubling turn of events, the Belgian Financial Services and Markets Authority (FSMA) reported a significant increase in consumer complaints in 2017. With a total of 1,710 messages, the FSMA identified 792 complaints related to fraudulent activities.
Fraudulent Activities on the Rise
More than one-third of all complaints were related to the following schemes:
- Pyramid Schemes: 169 complaints
- Binary Options: 164 complaints
- Boiler Room Scams: 112 complaints
Compared to 2016, this represents a 13% rise in the number of complaints.
FSMA’s Aggressive Campaign against Scams
The FSMA’s public education and advocacy efforts about potential fraudulent schemes may have contributed to the rise in reported scams. For instance:
- Criticism and Ban on Binary Options: The FSMA’s criticism and subsequent ban on OTC forex trading in August 2016 didn’t seem to deter fraudsters proposing binary options schemes. Complaints related to binary options despite the ban continued to emerge.
- Push for Public Vigilance: The FSMA’s calls for public vigilance and its frequent warnings about different types of scams could have led to an increase in reported cases.
Cryptocurrency Fraud Cases: A Caution
Although cryptocurrency fraud cases were less prevalent, with only 33 reports, the FSMA is urging continued caution in this area.
Making a Difference: Report Fraud
The FSMA urges defrauded individuals to report their cases to the local police. They emphasize that the identification and apprehension of fraudsters only begins after a report is made. The FSMA publishes warnings on its website and forwards details of reported incidents to the relevant judicial authorities and foreign supervisory authorities.
FSMA’s Warning List Expands
The FSMA’s list of warnings grew significantly in 2016, with 46 warnings targeting boiler rooms and 42 focused on binary options. In 2016, the FSMA’s list of warnings expanded by 70%, illustrating their ongoing efforts to combat financial fraud.
The Importance of Reporting
“The more information we receive from consumers, the better we can protect and warn them,” said Jean-Paul Servais, Chairman of the FSMA.