[Update, April 2016] Lbinary sued for online scam
In April 2016, two law firms, Giambrone Law and Healys LLP, announced that they will sue Lbinary and NRGBinary for an online scam that cost 70 of their clients over 4.3 million euros. The case will take place at High Court of Justice in London, as both brokers used payment services by third company regulated by UK’s FCA. This case could be a precedent
This case could be a precedent as it presents a lawsuit by clients from different jurisdictions that takes place at the same court (in London). The prosecution announced that their battle against scam brokers won’t stop there, as they plan to sue more brokers, including many found on our Black List.
Update on Scam
While FBO warned traders about this broker in April 2015, now Canada’s Ontario Securities Commission (OSC) noticed irregularities about this broker as well. In January 2016, they published a warning about the status of LBinary and advised public not to do business with this broker. Even though FBO always welcomes such warnings, it is another proof that regulatory bodies are sometimes slow when it comes to noticing scams.
What makes this scam even more incredible is that, obviously, the company behind the brand continues to do business under another name. While in 2015 LBinary was operated by Chelestra Ltd, now it is operated by Depix Holdings Limited.
FBO recommends all traders not to make a deposit with any brands operated by these companies and to use a safe broker from Top List instead.
LBinary Scam – Background
Customer that was not signed up over FairBinaryOptions.com to LBinary contacted us in an effort to see what options are left, after her LBinary trading account went from cca. $10,000 to $7 over night. Even though she was not referred through Fair Binary Options, we always try to assist since LBinary has been on our list for some time now and we thought the charges were serious. The customer explained how LBinary ignored her e-mails, traded on her behalf even after she told them to stop, awarded her bonus without asking her for it and denied her withdrawal before they placed trades that wiped her account clean. This is how the LBinary scam went down.
LBinary Scam – Bonus Without Customer Approving it
Customer deposited with LBinary after making an account. LBinary took the money from customer’s credit card through smaller tranches of $200, $500 and $1000, amounting to over $6000 USD. In a few instances, they awarded bonuses on her account. One account was deposited ($5000) only to be withdrawn later. This can be as LBinary scam with bonuses involved. Several days later, total Lbinary bonus of $10,000 was added to the customer’s trading account, as shown in the banking history screenshot below. Customer claims she never agreed to any bonuses.
There is also no proof of her agreeing to accept a bonus. Even if LBinary is not regulated, it is good to take a look at CySEC’s stance on this matter, that shows it is required to have a proof in writing that the customer agreed to a bonus. Brokers that award bonuses automatically can be seen as scams – even if not regulated by CySEC. Due to the fact that bonus was awarded, LBinary claimed the customer cannot withdraw her deposit. This was also addressed by CySEC at some point – good practice being that customers have always right to withdraw deposited funds. Most important here, remains the fact that she did not agree to accept any bonus. Broker failed to prove otherwise and this is why we consider this LBinary scam.
LBinary Scam – Trading on customer’s behalf even after explicitly ordered to stop
LBinary does not have any kind of authorization to trade on behalf of customers or give them advice. In some cases, there is a substantial conflict of interest problem.These things must be taken very serious when inspecting this LBinary scam case. When LBinary employees started trading on behalf of the customer, they were willingly entering conflict of interest. At the point when customer wanted to withdraw money from the account, withdrawals were canceled, in part due to bonuses she did not accept. At that time she had $10,107 on her account, she wanted to withdraw more but got no response. Then, she noticed her account was getting smaller, falling to $9000. When she saw that the account was active without her input, she tried to contact the broker responsible ordering them by mail to stop, as shown in the screenshot below.
Due to disappearance of a portion of the funds from the account and account still being active, she contacted the customer support where she explained the problem and the fact that at that moment her account was reduced to mere $7. On the chat, she was ignored for 30 minutes before leaving it, as can be seen on the screenshot below. LBinary scam has this widespread fraud behaviour we keep seeing when dealing with these matters. Also, there is proof that broker did at times trade on her behalf because they sent her mails with the reports on winnings.
The broker continued to ignore her and in communication we had with them, they claimed the customer agreed to have bonuses awarded – for what they provided no evidence, and they claimed that last trades that cleaned up her account were in fact not made by Lbinary employees but by the customer herself.
But one must ask, why would a customer who wants to withdraw money, make two final trades only to lose all the money on the account. Also what about e mails to the broker, that customer sent after noticing the first decline in the amount of money on the trading account. Why were those e-mails ignored even if the customer for some strange reasons acted against her own interest.
LBinary – Blacklisted
Fair Binary Options, has been dealing with this case for some time ever since receiving the complaint and we think the evidence against LBinary presented here is overwhelming. These are all standard scam tactics that unethical brokers use to steal from unsuspecting customers. This is the reason why we are advising customers to stay away from LBinary and to trade with some other broker on our list of recommended binary options trading providers. In case you do not know how to trade binary options or do not have the confidence to do so, we recommend using auto trading service, such as BinaryOptionsRobot, instead of relying on brokers to manage your accounts on your behalf.