Terms And Conditions! Read Them Future Trader!
I usually don’t try to change people’s opinions. I lay out my opinion and I explain the best I can why I believe it’s better to do things my way, but if you still stand by your opinion I won’t obsess over changing your mind. As someone said, life is the sum of our choices and I don’t want to make those choices in your place. With that in mind, today I will lay out my opinion about why you need to read the Terms and Conditions of your Binary Options broker and you will choose whether to agree with it or not.
Why Read? It’s Sooo Boring!
When you are looking for a broker the pool of candidates is huge. There are hundreds of websites that offer binary options trading services (commonly known as brokers) so if you were to read the Terms and Conditions of each one of them you would probably be 90 years old by the time you actually open an account. Reading them all is not a valid solution but once you narrow the number down to a few brokers, you should start reading their Terms and Conditions because some of them contain almost outrageous stuff. For more insights into the brokers’ Client Agreement, I recommend taking a look at this article about T&C (link at the bottom of this page). You will also find important stuff about deposits, withdrawals, bonuses and price quotes, all things that should be of great importance to you, the trader.
Throughout this article I will not name the brokers but I will give you some examples of what you can find in their Terms and Conditions. If after reading this article you still want to invest money without being aware of what’s around you, go ahead.
For some weird reason brokers think that if you don’t trade it means you don’t need that money anymore and they can have it all: “A trading account where no transaction has been conducted for a 7 month period is considered dormant. Dormant accounts will be charged a maintenance fee. The maintenance fee is 100%, based on account balance.” *(see note at bottom of the article) Now let’s think about it for a while: if you don’t trade for 7 months, all the money in your account becomes theirs?!? Is that normal? Why should they take all your money? Couldn’t they just return it to the bank account/credit card/e-wallet it came from? Or couldn’t they just leave it there in the account and maybe deduct a smaller maintenance fee… like 1%, not 100%. There are other solutions, way better solutions, but hey, if they can get all your money, why shouldn’t they…
Recently we’ve reviewed a binary options broker regulated by CySEC. The name doesn’t matter now because I want to make you aware of the importance of reading Terms and Conditions, not to bring bad publicity to a certain brokerage. They don’t charge dormant accounts with 100%, but they still take a hefty sum: 42 EUR/USD/GBP each month (an account becomes dormant after 6 months). That sum is bigger than my monthly phone bill and I don’t get anything in return… at least when I pay my phone bill I get something back (phone calls, internet). So you see, even brokers that are regulated by CySEC can charge you big sums of money for doing nothing. They have the right because you gave them the right when you didn’t read the Terms and Conditions and you agreed to everything they wanted. Who’s to blame?
If your account manager or live chat/support representative is telling you what you want to hear and you think there’s no need to read the Terms and Conditions… think again: “This Terms and Conditions document supersedes any and all prior agreements or understandings among the parties, if any…” * (see note at bottom of the article). You know what that means? It means that if anyone inside the brokerage (live chat, email, phone) told you that you can withdraw at any time, that you have 100 insured, risk free trades, that the bonus can be withdrawn at any time, that you will be wired your money in two hours or any other too-good-to-be-true information, but this is not in the Terms and Conditions… it doesn’t matter. If it’s not in the T & C, it doesn’t exist, it’s that simple. You are probably familiar with our Scam Watch series where we respond to the biggest or funniest complaints received during the previous month. Well, these little articles are full of people complaining that their account manager promised them something but didn’t keep their word, so you see, I am not just making stuff up. People get lured in with empty promises and then the brokers can easily say things like: We fired your last account manager because he was offering things that contradicted our Terms and Conditions. Unfortunately you have to pay the price because the brokerage will always enforce the Terms and Conditions… oh and they won’t fire the employee, they will just assign him/her a new fake name.
This last one is the icing on the cake. I saved the best for last because it blew my mind when I’ve read it the first time. By agreeing to this broker’s Terms and Conditions, you agree to let them steal your money in a legal way: “Whenever a Client transfers funds to the Company, those funds belong to the Company…” * Yes, you read that right. Your money is not your money anymore. It gets even better: “The Client will not have a proprietary claim over money transferred to the Company, and the Company can deal with it in its own right…” again, your money becomes their money. And finally, on the same paragraph they say: “… if the Company has suffered losses unrelated to the performance of the Client’s Account, the Company may be unable to satisfy redemption requests or request for distribution of cash or securities.” What I understand from this is that if they have financial difficulties (unrelated to your trading account), they can refuse to pay you… oh snap, if only you would have taken the time to read the Terms and Conditions before depositing.
The Lesson to be Learned
Yes, reading Terms and Conditions is boring, I’ll give you that, but after reading this article aren’t you at least a bit worried about what that document contains? Wouldn’t you sleep better if you knew what’s in it? Come on, you actually give access to your money to some broker when you click on “I agree to the T&C” (just to make sure everybody understands: you cannot open an account without clicking on “I agree”). Now remember the opening of this article? I don’t try to impose my opinion on you, I am just laying it in front of you, trying to give you what I consider to be good advice. The final choice is yours, but please don’t come complaining that brokers are scamming you if you don’t even read the T & C. Nothing is a scam if you agreed to it!
*Note: These are not exact quotes; some words have been modified, without changing the overall meaning of the phrase.
[BO TC 2]