Finns have lost over €100 million to digital fraud in less than three years – Let’s stick it to the scammers!

In the last two and a half years, Finns have lost over €100 million to fraudsters. In the same period, banks were able to intercept and recover €65 million that was about to be transferred to criminals.

Both amounts have been growing year by year, and Finance Finland’s CEO Arno Ahosniemi estimates that the end-of-the-year figures will set new records.

“Anti-fraud experts have a new saying: ‘Fraud is the new dope’. What they mean by it is that digital fraud has become more profitable than illegal drug trade.”

The fraud statistics are based on data collected from Finnish banks. Finance Finland compiles the data every six months.

Finns’ heaviest losses have come from investment fraud – a total of €36 million in two and a half years. Unfortunately, it is likely that even this sum is very much on the low side.

“Victims of investment fraud rarely report their losses to their bank. Banks also have low visibility on investment fraud because it often takes place on cryptocurrency exchanges, which are not connected to banks. The actual number is probably at least three times higher”, says Ahosniemi.

It is good to bear in mind that anyone can fall victim to fraud regardless of their age, gender or profession.

Will regulation help?

Legislators have not been resting on their laurels as the volume of fraud has continued to climb. The European Commission has proposed several new ways of combatting financial crime.

One of the proposed measures is allowing payment service providers to share information on accounts they suspect may be linked with fraud. The Commission also wants banks to increase awareness of payment fraud among their customers and member states to take part in this education work.

“These proposed measures are good and reasonable. Banks are already using a variety of channels to increase customer awareness, but a government campaign run on television could improve reach significantly”, comments Ahosniemi.

However, the proposed updates to the definition of strong customer authentication in payment authorisation represent a step backwards in terms of security. The Commission is proposing a change to the security mechanism that currently requires the use of strong authentication factors from two out of the following three categories: something only the user knows (e.g. a password), something the user is (e.g. a fingerprint) and something only the user possesses (e.g. a mobile phone). In the future, the required two authentication factors could belong to the same category, meaning that strong customer authentication could be based on two passwords, for example. According to expert opinions, this would undermine the security of payments.

“In proposing this, the Commission has most likely focused on its other objective, which is to enhance the ease of payments. But the unfortunate fact is that the ease and security of payments tend to fall on the opposite ends of the spectrum.”

Campaign headed by soap opera star Maija-Liisa Peuhu

Finance Finland’s anti-fraud campaign ‘Stick it to the scammers’ runs in several channels, featuring for example on bus stops and TV commercial breaks.

The campaign seeks to raise public awareness and knowledge of scams and fraud. The star of the campaign is the well-loved actor Maija-Liisa Peuhu, most famous for her role in Finland’s longest running soap opera Salatut elämät.

In the campaign, Peuhu encourages viewers to Stick it to the scammers – Catch on to fraud before it catches you.

“In fraud prevention, the most valuable players are regular people themselves, because they are the ones who control their own payments as bank customers. It is vital that we all learn to identify fraud attempts. The methods of fraud are continuously evolving, so the most valuable digital skill is a healthy level of scepticism”, Ahosniemi underlines.

Visit the campaign website at www.huijaamaton.fi. The website is available in Finnish, Swedish and English.