Online investments

Have you come across an invitation to register on a website offering high yield investments on the financial markets? If so, you should approach it with a high degree of caution as there are many fraudsters operating in this field. ECC can advise you on how to avoid potential pitfalls.

What are the risks?

There are several investment options, including:

  • binary options. A binary option is a high risk investment product based on rate fluctuations in assets such as currencies, shares, raw materials and indexes, which at best generate a profit but frequently result in a loss. 
  • investment in diamonds and other precious metals
  • investment in cryptocurrency

Despite the ‘rose coloured’ promises there is a real risk of you losing your entire investment, or more.

The FSMA (the Financial Services and Markets Authority) 2011warns since many years against the grave risks associated with these investments and continues to publish new alerts regularly. 

Websites offering binary options, investments in diamonds or cryptocurrencies are often based abroad, even outside the European Union. The postal address is rarely mentioned so that you don’t know who you are dealing with.

Who is authorised to offer online investments?

Any online broker addressing Belgian consumers must be recognised by the FSMA. If a website does not comply with the Belgian stipulations governing the provision of this type of investment services and is consequently not authorised to do so, its activities are considered illegal or even fraudulent. 

Always steer clear of unauthorised websites. FSMA strongly advises not to use certain websites and blacklisted certain fraudulent websites offering investments in:

Be aware that these list cannot be considered as exhaustive.

Who can you contact in the event of problems?

If the website has been authorised you can submit your case to the FSMA, which can impose the necessary measures to stop illegal practices. You could use Ombudsfin to try to reach an amicable solution for your problem. This free mediation service can negotiate directly with the other party. 

If the website has not been authorised by the FSMA, there is little hope of finding a solution. Submit your case to the FSMA and lodge a complaint with the police. However, the chance of you getting your money back is very small. 

If you paid for your investment with a credit card you could dispute the payment via www.mijnkaart.be or www.macarte.be. Under certain circumstances your card issuer may refund your money. 

Tips

Observe the following preventive measures before using an online investment website.

  • Check the FSMA website (list of credit institutions or investment companies) to establish whether the online broker has been authorised.
  • Check that comprehensive contact data is available. 
  • Scrutinise the proposed investment product. 
  • Be wary of offers that seem to be too good to be true. 
  • Remember that the risk of loosing your entire investment is greater than your chance of making a profit. 
  • If in doubt do not venture into this dubious territory.