A new breed of offshore betting firms are coming under fire for claims they are misleading naive Britons with false promises of turning them into financial traders, while scamming them out of thousands of pounds.
Binary trading companies, which offer all-or-nothing wagers, called 'options', on whether a stock or currency will increase or decrease in value over a certain period, have seen a rise in popularity.
The companies, which are often based offshore in Israel but are registered in Cyprus, use slick promotional tactics on social media to share images of youngsters who claim to have won big with the companies.
Elijah Oyefeso, a 22-year-old who posts pictures of flash cars and his luxurious lifestyle online, says he used his student loan four years ago to start trading.
Oyefeso was featured on Channel 4's programme Rich Kids Go Shopping, in which he claimed to earn up to £90,000 ($117,000) a month betting on shifts in stocks and currencies.
A Sunday Times investigation into the practice revealed however that many Britons end up losing thousands in the process.
Furthermore, as most of the companies are based offshore, they are not subject to the same financial regulations as British companies.
Andy Fyfe, a financial crimes specialist at City of London police, told the Sunday Times that in the past three months, the national reporting centre Action Fraud had received 245 fraud reports related to binary trading. He also claimed the average loss was more than £20,000 – with upwards of £12m reported as lost this year so far.
He called binary trading "the latest and fastest growing iteration of investment fraud".
Investing or defrauding?
Alex Gerrard, 41, signed up last year with Banc De Binary, one of the industry's biggest operators.
"I was always intrigued about stocks – we all want to be like Warren Buffett," he said, referring to the famed American investor, became a millionaire in his 30s through trading.
Gerrard, a father of two from London, started with a £350 deposit but was encouraged to increase his investment to win bigger. In total, he put more than £26,000 on his account, much of it on credit cards.
However, in early February his broker encouraged him to trade on "anything moving right now" which ended up wiping out his account.
Gerrard complained, but a Banc De Binary manager told him the money could only be recovered if he invested more. He refused and has now reported Banc De Binary to Action Fraud on charges of breach of contract and misrepresentation.
He is now leading a group of people who feel they have been victimised by the firm. One customer lost £76,000, most of his life savings, claiming the company was made up of "con people".
Banc De Binary's troubles
This weekend Southampton football club dropped Banc De Binary as an official sponsor for the 2016-17 season after receiving questions from The Sunday Times about the company's practices.
In 2013, Banc De Binary was charged with breaching US financial laws by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). The SEC also used an injunction to block Banc De Binary from operating in the US.
In 2016, after a lengthy legal battle, Banc De Binary agreed to pay out $11m in fines and restitutions to US customers. The firm is now permanently banned from operating in the US, or taking on clients from the US.