Fraudsters use Bitcoin as bait

2023-10-25 | Frauds News Consumer

It has become increasingly common for fraudsters to contact consumers by email saying there are cryptocurrencies registered at the person's email address. Consumers are told that these assets can be released for a fee. This is the conclusion of Finansinspektionen’s review of investment fraud cases during the third quarter of the year.

Thousands of consumers fall victim to fraud every year. To prevent consumers from succumbing to fraud, we provide continuous information about current frauds and tips for what to look out for. Consumers who fall victim to investment fraud should always report the matter to the police.

Warnings on the rise

During the third quarter of the year, we have warned of 1,216 companies that have tricked individuals into investment fraud. This is a major increase compared to last year and an indication that investment fraud is still on the rise.

"Fraud is a vital and growing source of income for criminal gangs, and the amounts involved are in the billions. With promises of simple investments and large profits, consumers are tricked into investing. The continued high number of warnings supports our view that this is a growing problem," says Mikael Sandahl, supervisor at Finansinspektionen.

Bitcoin used as bait

Our review of the third quarter of 2023 shows that Bitcoin is the predominant bait fraudsters use to trick consumers. We have, for instance, seen several cases in which fraudsters claim that consumers have crypto assets such as Bitcoin in accounts on CFD crypto trading platforms. Often, they claim that the consumer has Bitcoin worth over a million Swedish kronor and that they can access it by paying a fee. Generally, consumers are contacted by email.

"We have previously seen similar fraud cases, but this one is particularly widespread. A basic rule of thumb is to never pay supposed fees to gain access to such payments. You won't ever see the money," says Mikael Sandahl.

Loans for a fee

We are also receiving an increasing number of reports from consumers who have been offered loans through fraudulent websites claiming that anyone can quickly and easily get a loan at a low interest rate.

It starts with ads in social media. Once the loan has been granted, victims are prompted to pay a supposed fee to have the loan paid out. Once the fee is paid, the individual receives additional payment demands but never sees the loan paid out. The claim is that the fees are for set-up costs, a first interest payment, insurance or for other administrative purposes.

"It is a typical form of fee fraud aimed at one of the most financially vulnerable groups, often individuals who already have problems making payments and are in debt. Always check that the company offering the loan has authorisation to do so and that they are listed in our company register," says Sandahl.

Emails may give fraudsters away, but remain vigilant

Consumers need to be vigilant about who is sending the email. No serious actor sends email from Gmail or Outlook accounts. Bona fide companies use their corporate email to contact customers.

Nonetheless, you need to remain vigilant. There is no guarantee that an email is genuine just because it contains contact information and a real company name at the end of it. Anything can be falsified. It is not uncommon that the emails incorporate Finanansinspektionen's or other crypto company names into their email address. There are examples of emails sent in Swedish and English.
As a consumer, you need to be aware that you have a responsibility when it comes to who you choose to invest with. Considering you lose the money you thought you invested, it is important to avoid investment fraud. And since there is no bona fide company behind the investment, you have no one to claim the money back from.

Avoid 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.