More and more consumers are reporting cases of fraud to the FSMA

In 2020, the Financial Services and Markets Authority (FSMA) received 1,555 reports by consumers concerning fraud and unlawful offers of financial products and services. This represents an increase of nearly 30 % over 2019 and of nearly 50 % over 2018. This increase can be explained in part by the fact that more and more consumers are contacting the FSMA before investing whenever they have reason to suspect that an offer being made to them may be fraudulent.

Out of 1,555 reports made by consumers to the FSMA in 2020, around 74 % were about fraudulent online trading platforms, false offers of credit and fraudulent offers of wealth management, alternative investments or pyramid schemes.

The phenomenon of fraudulent online trading platforms increased significantly in 2020. These platforms offer trading in binary options, CFDs and forex as well as cryptocurrencies. They appeared in May 2019 and attract their victims using scam ads on social media such as Facebook or even via dating apps. For more information: see the warnings of 3 December 2020 and 23 December 2020.

The FSMA estimates the losses sustained by victims of fraudulent online trading platforms to be at least 18.5 million euros between May 2019 and December 2020.

Fraud linked specifically to cryptocurrencies aims to persuade consumers to invest in supposed cryptocurrencies by promising them significant profit. This type of fraud is trending downwards. This downturn has coincided with the appearance of fraudulent online trading platforms. These two types of fraud have many points in common and their development seems to be linked. The same criminal networks may therefore be behind both types.

COVID-19 – Investment and credit fraud

The year 2020 was marked by the COVID-19 crisis. During this period, consumers increased their internet use. They were therefore more exposed to cold calls from fraudsters with a wide range of offers (offers of protective masks, fundraising scams claiming to be collecting money for victims of the virus, offers of vaccines, etc.).

As regards investment fraud, there has been no evidence of significant increase in the number of notifications directly linked to the COVID-19 crisis. What has, however, been observed is that fraudsters have not hesitated to exploit the public health crisis to:

• justify the failure to pay promised sums,
• claim payments for additional taxes supposedly owing as a result of COVID-19,
• offer fraudulent investments presented as an alternative to banks that may experience a crisis due to the pandemic.

For additional information: see in particular the warnings of 1 April 2020 and 22 April 2020.

Campaigns to counter fraud

The FSMA mounted several campaigns in 2020 to make consumers aware of the risk of investment and credit fraud as well as to help victims. Prevention is certainly the best way to combat fraud.

1. Processing 1,555 reports by consumers concerning investment and credit fraud
   All consumers who have contacted the FSMA have received an individualized and personalized reply. More and more consumers are contacting the FSMA before investing, whenever they have reason to suspect that an offer being made to them may be fraudulent. The FSMA carefully examines these reports. Where it has identified signs pointing to fraud, it recommends that consumers not respond to the offers in question and above all not make any payments to the offeror.
2. The publication of warnings against 143 companies acting without authorization in Belgium
   Alongside this campaign, 12 thematic warnings were published in 2020 to alert the public to general problems. Five of these concerned the risk of fraud relating to the COVID-19 pandemic. The warnings are published on the FSMA’s website and are disseminated via a press release as well as via social media.
3. The launch of an online campaign on Facebook and Google 
   Fraudsters usually contact their victims by means of social networks. The FSMA therefore launched an online campaign against investment fraud on Facebook and Google. The campaign, whose slogan is 'An offer that is too good to be true? Start by saying no', has been conducted entirely online. Its aim? To warn potential victims against offers that are too good to be true.
   
   The campaign was conducted in two waves. The first wave was launched on 19 June 2020 and was addressed to pensioners (60+). The second wave was launched on 1 October 2020. It was addressed to young investors (30-39) and more experienced investors (40-59). It also served as an opportunity for renewed efforts on Facebook to raise the awareness of pensioners (60+).
4. The development of a test: 'have I been the victim of fraud?'
   As part of the campaign 'An offer that is too good to be true? Start by saying no', the FSMA is offering a new test on its website that enables consumers to evaluate, based on nine questions, whether the investment offer they have received is fraudulent in nature. The result of the test is an indication of the risk of fraud. Are you in doubt about an offer you have received? Take the test yourself.
5. Reporting to the judicial authorities and blocking access to fraudulent websites
   An increasing number of consumers contact the FSMA as a preventive measure whenever they have the least doubt. As a result, the FSMA is able to intervene more quickly and to inform the judicial authorities sooner than before. Thus, in 2020 the Belgian judicial authorities blocked access from Belgium, at the FSMA’s request, to 84 websites that make fraudulent offers.
6. Production of awareness raising and fraud prevention videos
   The FSMA has continually taken initiatives to raise consumer awareness of the risk of investment and credit fraud. It is currently working on the development and production of animated videos and testimonies that will address this issue.
   
   The videos have a twofold aim: raising public awareness of the existence of this type of fraud and informing people of the most common investment and credit fraud mechanisms as well as of the steps to take if someone has fallen victim of fraud.  
   
   Check back in the spring to watch our videos!