Warnings for investment fraud continue to increase

Last year, Finansinspektionen (FI) published a record number of warnings of firms suspected of investment fraud. The trend continues. During the first half of 2023, the number of warnings increased by nine per cent compared to the same period last year.

During the first half of this year, FI published a total of 1,496 warnings regarding firms and websites without requisite authorisation, compared to 1,377 during the same period in 2022, a record-breaking year. The majority of warnings result from international cooperation with foreign supervisory authorities around the world, but are also issued as FI learns of Swedish consumers falling victim.

Fraudsters often demand payment in cryptocurrency
It is a clear trend that more and more fraudsters are demanding payment in cryptocurrency. Payments are made via a cryptocurrency exchange to the crypto wallet that is supposedly used by the firm offering the investment. Because banks have become more consistent about questioning transactions where consumers wish to exchange money for cryptocurrency, fraudsters have begun to avoid major banks. Instead, the fraudsters recommend using a less well-known bank where the exchange is easier to make.

"If the transaction requires the transfer of a payment in bitcoin or some other cryptocurrency, this is a red flag. Serious firms do not ask for payment in this manner," says Mikael Sandahl, a supervisor at FI.

Fraudsters request remote connection
Often, the fraudsters ask to connect remotely to the consumer's computer. In practice, this means that the fraudsters gain free access to bank accounts and, as a result, complete insight into the amount of assets available and where the money is transferred.
"No one would consider handing over the keys to their home to a total stranger. The same should be the case with computers. Never let an unknown person connect remotely to your computer, regardless of how convincing they may be."

Shares at a discount
Another form of fraud that FI is increasingly seeing is that fraudsters are offering well-known American shares at a discounted rate. Initial contact is often made by text message, encouraging consumers to click on a link to make the investment.
"Fraudsters make their living on offers that are too good to be true. Be cautious and avoid doing business with just anyone."

Examples of fraudulent companies
During the second quarter, we issued warnings about companies such as Tierra500 and Deltascrypto. These companies do not exist, but they offer trading in CFD contracts (contracts for difference, a type of derivative), shares or cryptocurrencies. Another common denominator for fraudulent companies is that they have costly and often times credible façades that are difficult to identify as false, which only shows just how far fraudsters are willing to go to convince their victims.

Investor alert: Tierra500

Investor alert: Deltascrypto

Protect yourself from being tricked
Investment fraud occurs frequently and affects many consumers. The fraudsters are skilful and work both methodically and over the long term to trick people out of their money. Most often, they use a well-polished sales pitch and refer frequently to well-constructed façades that are difficult to identify as false. Therefore, we publish information on a regular basis about both ongoing frauds and common methods, and we also publish tips to help consumers avoid being caught in an investment fraud. One example is our five top tips for how to identify a fraud attempt. (In Swedish)

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