Increasingly, Diamonds Are Every Former Binary Options Scammer's New Best Friend
Now that an increasing number of countries are banning phony binary options brokerages, the scammers who once ran them have not necessarily repented and closed up shop. Many of them are busy searching for new attractive offers to entrap unsuspecting investors. One of those promising fields is diamonds.
Be careful. Increasingly, diamonds are a scammer's best friend.
Let's clarify this before we go any further. Yesterday's binary options scammers are not hawking fake diamonds to newly engaged couples. There are plenty of others who have been doing that for years. By now, every educated consumer knows that any diamond purchased must be accompanied by a certification of authenticity from an industry oversight organization. Moreover, to prevent the possibility of a switcheroo, you must verify that the authentic diamond you select is the diamond you buy and the diamond you receive.
Fractions of Diamonds
Instead, veteran scammers are setting up websites promoting investments in diamonds that have not yet been sold to the general public. To entice smaller investors who would otherwise assume that their level of savings would not enable them to do so, some of these sites also claim that you can invest in fractions of diamonds at a fraction of the cost.
The criminals who stand behind diamond investment scams garnered extensive experience when they ran their binary options websites. Their diamond investment business model is a duplicate of the one they used beforehand. Their websites glitter and promise immediate, spectacular returns. You're invited to complete a form and leave your name and contact information. Soon afterwards, you'll be phoned from their "boiler room," a call bank staffed by hungry, young salesmen who'll use fake names (even if they deny it) and introduce themselves as "agents," "representatives" or even "brokers" (the use of the last of these three terms is patently illegal, since a legitimate broker must be licensed to offer an investment prospectus).
Whatever way he may prefer to define himself, he'll use every sales trick in the book to connive you into investing in the diamonds he pretends to offer, even if it's just a token sum at this point. He may, for example, claim that his "brokerage" has just gotten its hands on a rarity, like colored diamonds, which will quickly jump in value, and he'll offer you the opportunity as a new client to get in on the ground floor (by the way, investment in colored diamonds is highly speculative and the stones themselves are often difficult to resell). So you invest a little bit, maybe because he sounds convincing, maybe just to see if it's real, maybe just to get him off your back. But now his foot is in your door, and he'll soon be back and inform you that your modest investment has now shot up and you should take advantage of the opportunity to invest more. This time a lot more. After all, you profited from his good tip, right? So you do. The scenario keeps repeating itself.
Finally, the time will come when you want to cash out and sell off at least some of those investments. But, just like they do in those binary options boiler rooms, he'll tell you that you can't, that the fine print in your contract prohibits it unless you invest a zillion dollars (or carats) more, or some other excuse. If you insist, he'll get abusive, yell and scream and even hang up the phone if he has to in order to cut you off. If you call back, he won't answer, or you'll be told he isn't available. Or that he left the firm and didn't leave a forwarding address. Or that your file has been misplaced or even lost (inadvertently, of course) and, therefore, there's nothing they can do for you.
Of course, legitimate diamond brokerages do exist and many maintain an online presence. Diamonds are a legitimate investment that can yield high returns over time. Success, however, requires a high level of expertise, which legitimate dealers can provide. Fraudulent diamond investment brokerages, however, have no diamond inventory. Their business model is built on swindling unsuspecting and inexperienced investors over the internet.