FIN-FSA warns of rising investment scams

Investment scams have become widespread, as demonstrated by an increase in the number of contacts associated with scams. It is typical for investment scams to lure investors to invest in unreal objects, to present investors with unrealistically large returns, or to attempt to artificially manipulate markets. In investment scams, investors are often requested to transfer money to an account managed on the investors’ behalf. In scams, returns may be paid with money received from new investors, or fabricated news may be spread about the investment object. The purpose of doing so is to manipulate the value of the object and allow the fraudster to benefit from the price changes. A fraudster may also present themselves as a representative of a bank or investment firm and request a transfer of funds to the fraudster’s account.

- The use of social media in investment scams has risen significantly. For example, social media can be used to promote various chat groups giving investment tips, and the attractiveness of marketing may be increased by unauthorised use of the names and images of people or entities familiar in the investment markets, says Marko Hovi, Head of Division.

Investors should always verify service provider's authorisation

Investment services may only be provided by an authorised investment firm or bank, and additionally, in the case of certain investment services, an authorised fund management company or Alternative Investment Fund Manager. Investors are always advised to verify the service provider's authorisation or notification at the FIN-FSA website or, in the case of a foreign service provider, at the website of the supervisory authority in its home country. Investors have also been presented with falsified authorisation certificates at times.

- We urge investors to be careful and cautious. One should not rely on social media tips for high-risk investments, as information on the service provider's background and reliability should always be sought widely from different sources, and one should study the investment object carefully before making an investment decision. Money should never be transferred to an unauthorised service provider's account, states Hovi.

If an investor has or suspects they have fallen victim to an investment scam, they should immediately cease all payments and contact their bank. Scams should be reported as an offence to the police, and help may additionally be sought from Victim Support Finland. Data security breaches may also be reported to the National Cyber Security Centre. The FIN-FSA does not handle individual scams. However, investment scams can be reported to the FIN-FSA, which will consider matters it has been contacted about in its supervisory activities.

The FIN-FSA has previously issued warnings about attempted scams related to crypto-assets and market manipulation. The FIN-FSA maintains a warning list at its website of scams and unauthorised service providers it has become aware of.

Links:

Cryptocurrency investment scams on the rise – victims have few remedies (in Finnish)

Investment discussion on social media (Market Newsletter 2/2021)

Warning lists and unauthorised service providers

Contact information

For further information, please contact: Matias Möttölä, Senior Supervisor, and Marko Hovi, Head of Division. Requests for interviews are coordinated by FIN-FSA Communications, tel. +358 50 385 5030 (weekdays 9:00–16:00).