Inside the boiler room
An insider described to the Bureau the culture inside disreputable binary options selling rooms. There are three stages to the sales process which has seen thousands of British people lose millions of pounds.
Generating leads
The first stage for the employees is generating new leads – names and phone numbers of potential targets. Many binary options firms circulate spam emails to millions of people a day all round the world. They evade anti-spam laws by routing traffic through countries with no effective regulation. They contain videos of individuals who supposedly have made fortunes by trading in binary options. People who respond to the emails are put on the target lists which can generate a new lead every 30 seconds. The insider told us some companies spend millions of dollars a month buying what he called “mugs lists”
The hard sell
Next, the salesmen – or less often saleswomen – hard sell to these names, convincing them to sign up and invest money. They’re hyped up, the insider told us, with some companies supplying “loud music, cocaine on the tables, video games, free booze, crates of whisky”. They work through to 4am so they can call European and American targets, he said, and the sellers are told they have to convert at least one of their leads into a client every day. Converting means persuading the punter to make an initial investment of a few hundred pounds, with the sellers getting a commission of around 45% on each deal, he claimed. Some companies booked cinemas for special showings of “The Wolf of Wall Street” to their sales teams. The insider told us that after clinching a deal sometimes “they go out and have a joint outside” before making the next call.
“Retention”
A separate group of more experienced and even more ruthless sellers then target the punters who’ve made that first investment. This is called “retention” and is where the real wolves come in, pressuring investors to put in thousands of pounds. In some companies these sellers are expected to bring in $100,000 by the end of each month or be sacked, said the insider. Their commissions are between 3 and 10%, he said, with “most of the fraud [taking] place in the last ten days of the month – because they have to make their bonus targets”. These are the people who are urged to “rape the clients” financially, said the insider, adding they are “on the look out for customers with platinum credit cards” so they can charge tens of thousands without proper authorisation. Traders swapped tales of clients who committed suicide after finding out they’d been scammed, he claimed.
The most successful salesmen are rewarded with invites to free sex parties with strippers and prostitutes and drugs, he said. The insider told us that after attending one of the parties “I was never able to look at anyone in that office the same way again”.
