Banking Sector Sees Surge in Fraud Cases in Kyrgyzstan
Recent reports from the National Bank of the Kyrgyz Republic have revealed a sharp increase in cases of fraud involving foreign investors who deceive local entrepreneurs under the guise of investing in the country’s economy.
How the Scam Works
The scam involves fake investors contacting Kyrgyz partners and offering to invest millions or even billions of dollars or euros. The investor sends copies of documents supposedly confirming the transfer of funds, but when the partner goes to the bank to receive the money, they are told that no such transfer was made, and the bank cannot help as the documents are fake.
Red Flags
Fraudsters may exhibit the following behaviors:
- Insisting on using alternative payment systems, such as TELEX or RTGS, instead of SWIFT
- Demanding additional details like IBAN for transferring funds
- Claiming that there were difficulties with the transfer or that the money was sent but is stuck in transit
How to Protect Yourself
To avoid falling victim to these scams:
- Research the partner’s business reputation, financial statements, and other credentials before concluding any contractual obligations
- Be wary of partners who insist on using alternative systems or demanding additional information
- Report any suspicious behavior to the authorities
Additional Tips from SWIFT
According to SWIFT analysis, the lack of an Alliance Lite2 interface or a SWIFT gpi service should not serve as an obstacle to making transactions through SWIFT. Any suspicious behavior should be reported to the authorities.
National Bank Recommendations
The National Bank has recommended that local companies pay closer attention to the process of studying and choosing their partners, especially when agreeing on large amounts of “investment”. Banks around the world use SWIFT because it is a secure system that provides access to a 24-hour high-speed banking information transfer network. If a bank cannot receive a transfer, it is worth making claims to the potential partner, as Kyrgyz banks have no interest in delaying the issuance of an incoming transfer.
Conclusion
The National Bank has urged local companies to be cautious and not fall prey to these scammers, who are using the SWIFT system to deceive and defraud innocent businesses. By being aware of these tactics and taking necessary precautions, entrepreneurs can protect themselves from falling victim to these fraudulent schemes.