Belgian financial regulator the Financial Services and Markets Authority (FSMA) has issued a warning statement to traders against the increasing number of identity theft from authorized companies leading to investment fraud.
In the official warning statement, the FSMA explained: “In this form of fraud, swindlers take on the identity of an authorized company in order to give consumers the impression that they have the authorization to offer them investment services, whereas this is not the case. The services they offer are entirely fraudulent.”
Explaining the operational tactics of the fraudsters, the FSMA said that these firms try to convince investors to take their investment offers pretending that they work on behalf of the authorized firms and are compliant with the necessary regulatory frameworks.
The fraudulent entities even steal the names and other legal information of the authorized service providers, including their postal information. Moreover, the fraudsters clone the websites of the regulatory authorities as one such case surfaced about the hijacking of the website of French banking and insurance regulator Prudential Supervision and Resolution Authority.
Crypto – the King of Scams
The FSMA has pointed out that such scamming tactics are higher for the websites offering cryptocurrency trading services. Compared to the mainstream investment services, this sector is nascent, and the lack of proper regulation also aids to the rescue of the fraudsters.
Why Your Enterprise’s Finances Rely on Employee TrainingGo to article >>
Last month, the agency added 14 new cryptocurrency trading platforms to its suspected scams’ list which took the entries of the list to 113 websites.
“The FSMA recently issued a warning against a significant number of such platforms that offer ‘miracle’ investments in cryptocurrencies that appear very simple and lucrative, but that are in fact scams,” the regulator noted.
No Solid Ways to Avoid Scams?
Though the watchdog agency suggested a few precautionary measures to avoid such scams, it warned the investors that none are full proof.
However, before making any investment, the agency requested the potential investors to verify contact details of the company from the FSMA’s website, compare official information with facts or even to contact the FSMA’s customer service desk in case of any doubts with the identity of the interlocutor.
The Belgian watchdog is not the only agency to issue warnings against such identity thefts as agencies across Europe are frequently busting fraudulent platforms. Today, along with the FSMA’s warning, the Italian financial regulator Commissione Nazionale per le Società e la Borsa (CONSOB) has issued a notification adding several new firms to its warning list of probable scams.
These scams are not confined to Europe as watchdog agencies across the globe are issuing warnings against fraudulent financial businesses and scams.