Luminor: Fraudsters are also active in the field of investments

As the interest of people in the Baltics and Latvia in investing grows, so does the activity of fraudsters, constantly using new ways to gain personal profit. How to recognize and avoid fraud attempts so as not to lose the invested money – shares Aleksejs Makarus, Head of Luminor Financial Crime Prevention Department.

“Recently, we have received information not only about phone fraudsters who, by pretending to be bank employees, try to defraud customers' Internet banking access or private data, but also about fraudsters who offer people quick profit by investing in non-existent investment schemes. Fraudsters most often contact the potential victim by phone or in writing, speak Russian and in an intrusive, even aggressive tone. We would like to remind you that the deliberate transfer of bank access data to third parties is prohibited and may have irreversible consequences,” indicated Aleksejs Makarus, Head of Luminor Financial Crime Prevention Department.

How to recognize fraudsters? 

In the field of investments, fraudulent activities can most often be recognized when a person is offered quick, large and risk-free profit. The tone in which the offer is received is also important – an intrusive and aggressive manner may indicate an attempt at fraud. Observations witness that recently fraudsters have only spoken Russian – if a person refuses to speak Latvian, it can be perceived as one of the "red warning flags". 

Special caution must be taken if you are asked to provide or disclose your account number and payment card details, such as the card number and CVC code on the back of the card, as well as Internet banking access passwords and Smart-ID codes. If a call, text, e-mail with such a request is received or the "service offerer" requests to take control of the computer via one of the remote control programs, this should be rejected, since such action will never be taken by a bank representative or any other legitimate investment service provider. 

If fraudster is craftier or there is a suspicion of fraud, and money has been transferred to the fraudster or payment card, Internet banking data have been leaked, the bank must be notified as soon as possible.

What are the most common methods of investment fraud? 

One of the most popular ways for fraudsters is opening of an investment account, which often takes place with the personal involvement of the person. The fraudster asks the person to submit his or her documents and download a program, thus giving access to the person's devices. After the money is transferred, the fraudsters also periodically send reports on the return on investment. In most cases, the reports show huge profits, which can encourage the person to continue making increasing contributions to the fraudster’s specified account. Despite the "results", the person cannot access the investments in the account and the money remains the property of the fraudsters.

Luminor expert points out that vigilance should also be maintained with regard to the various pyramid and so-called Ponzi schemes. Initially, these schemes even allow to make a profit, but they aim to make people invest more and more and attract their friends and family. In fact, the return on investment is deceptive, and as the inflow of new scheme participants declines, so does the money and the fraudster who has previously actively communicated with investors about profit opportunities.

Fraudsters often involve people in fraudulent schemes in order to use them as money couriers, or so-called “money mules” for the purpose of transferring the illegally obtained funds to financial institutions of other countries. These people pass on their internet banking access details to fraudsters for a fee of 50 to 200 euro without realizing that their accounts can be used to steal other people's life savings and that they too can be held liable for their involvement in the fraud.