Financial Fraud Surges in France: A Multi-Billion Euro Threat Amidst Covid and Low Interest Rates

Paris, France - Amidst the ongoing Covid-19 crisis and record-low interest rates, financial fraud is on the rise in France. In a joint press conference, the Parquet de Paris, Autorité des Marchés Financiers (AMF), Autorité de Contrôle Prudentiel et de Résolution (ACPR), and the General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) presented the latest developments in financial fraud cases and prevention measures.

Key Findings on Financial Fraud in France

Financial fraud is a persistent and intricate issue fueled by the economic downturn and the allure of high yield returns.
97% of the French population acknowledged the high risk of investment scams.
According to the Paris Public Prosecutor’s Office, annual losses from financial fraud cases amount to around €500 million.

Spectrum of Financial Fraud

Financial fraud covers a broad spectrum, with losses ranging from €72,000 per victim for savings account scams to €20,000 for crypto-asset trading scams based on victim statements. Some cases affected hundreds of victims.

Savings Accounts and Loan Scams

Losses from savings account scams averaged €72,000 per victim, outpacing losses from loan scams at €12,000 per victim in 2021.

Trading Scams on Forex and Crypto-Assets

Trading scams on Forex and crypto-assets experienced a resurgence in 2020 and 2021, causing significant losses of €38,000 and €20,000 respectively.

False Offers

False offers for investments in airport parking spaces and nursing homes led to even higher losses, exceeding €50,000 and €70,000 respectively.

Offenders’ Modus Operandi

Offenders collect victims’ personal data and build trust through manipulative arguments and repeated calls before encouraging them to invest substantial sums.

Social media and influencers have emerged as a new entry point for fraudulent activities, reaching a younger audience. Misleading online commercial practices, particularly from influencers, have become a priority focus for the DGCCRF.

Combating Financial Fraud in France

To combat fraudulent activities, the AMF and ACPR have intensified cooperation, regularly publishing warnings about fraudulent offers and updating their blacklists of unauthorized actors.

Public Awareness Campaigns

In November 2021, the ACPR and AMF launched a public awareness campaign, “Don’t do online or over the phone what you wouldn’t do in real life,” attracting over a million views.

International Cooperation

International arrests of suspects in non-EU countries like Israel and the United Arab Emirates have proven effective.

New Digital Injunction Powers

Since the law of 3 December 2020, the DGCCRF has new digital injunction powers, allowing it to display warnings to consumers, demand delisting from search engines, or even order the blocking, transfer, or deletion of domain names. The AMF can also block access to fraudulent sites.

Conclusion

These measures, coupled with increased public awareness and transparency efforts, aim to curb the prevalence of financial fraud in France and safeguard investors.