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Fraudulent online trading platforms: 53 per cent increase in reports

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In 2021, the Financial Services and Markets Authority (FSMA) received 1,918 consumer questions and complaints on the subject of fraud and unlawful offers of financial products and services. This is an increase of 23 per cent over 2020. Reports concerning fraudulent online trading platforms in particular have seen a major increase (+53 per cent). This increase is explained in part by awareness campaigns launched by the FSMA in 2020 and 2021. By way of information, a little more than half of the reports received in the second half of 2021 (56 per cent, that is, 466 out of 831) are complaints by victims.

Unlawful offers of financial products and services in 2021 Number of reports received in 2021 Change as compared to 2020
Fraudulent online trading platforms 724 +53 %
Fake credit offers 245 +12 %
Fraud linked specifically to cryptocurrencies 109 -11 %
Boiler rooms 62 -50 %

Of the 1,918 consumer reports received in 2021, about 40 per cent were about fraudulent online trading platforms that offer trading in binary options, CFDs, Forex products and cryptocurrencies. These types of fraud are continuing to increase. Last year, the FSMA received 53 per cent more reports relating to this phenomenon as compared to 2020.

These platforms thus continue to attract consumers via false advertisements on social media. Such advertisements use the images of Dutch-speaking or French-speaking celebrities without their knowledge.

In 2021, these platforms diversified and modernized their techniques. They are disseminating more and more promotional videos on social media such as Twitter and YouTube. They also use mobile applications that offer virtual currencies or training programmes. After having clicked on the message published on social media or having downloaded one of these applications and entered their contact details in the form, victims generally receive a call from the fraudsters, who make a very specific investment offer (in shares, alternative investment products, virtual currencies, etc.).

Based on the notifications received between May 2019 and December 2021, victims of such fraudulent platforms already appear to have lost at least 50.5 million euros (of which 25.5 million were in 2021). This number is purely indicative, since not all victims contact the FSMA or they do not always tell us the amount they have lost.

Actions against fraud

The FSMA conducted several targeted campaigns in 2021 to raise consumers’ awareness of the risk of fraud.

  1. Launch of a video campaign to raise awareness of online fraud

In order to extend its efforts to raise even more people’s awareness of investment and credit fraud, the FSMA put out 10 animated videos and video testimonials. The purpose of these films is twofold: to make the public aware of the existence of this type of fraud, and to inform them about the most common investment and credit fraud mechanisms and the steps that victims of such fraud can take. The videos are available on the FSMA website.

  1. Launch of a digital campaign on Facebook, Instagram and Google

During World Investor Week 2021 (a thematic week organized by IOSCO in October 2021, the FSMA launched a new digital campaign against investment and credit fraud on Facebook, Instagram and Google. The Facebook and Instagram posts and Google Display ads in the October 2021 campaign were viewed nearly 22 million times. The visuals proved very effective. Among those who saw the campaign, 182,089 clicked one of the posts and were transferred to the FSMA site.

  1. Publication of warnings against 156 companies working unlawfully in Belgium

Of the 156 warnings published by the FSMA in 2021, 75 – that is, 48 per cent – were specifically against fraudulent trading platforms. Parallel to these, 3 thematic warnings were published to raise public awareness of the topic of theft of banks’ identity and the theft of the name and logo of the FSMA itself.

  1. Reports to the judicial authorities and blocking access to fraudulent website

A growing number of consumers are contacting the FSMA preventively as soon as they have the least suspicion. Thanks to these efforts, the FSMA can intervene and inform the judicial authorities more quickly. The Belgian judicial authorities were thus able, at the FSMA’s request, to block access from Belgium to 128 websites with fraudulent offers.

Recommendations if you have any suspicions that an offer being made to you is fraudulent.

  • Contact the FSMA directly via the consumer contact form.
  • Consult the FSMA website and find out how to recognize and avoid fraud.
  • Lastly, take the test on the FSMA website to find out if the offer you have received may be fraudulent.

This news item was originally published by the Financial Services and Markets Authority (FSMA BE). For more information, please see the Source Link.

Regulator Information

Abbreviation: FSMA
Jurisdiction: Belgium

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