Swedening the Fight Against Financial Crime: Soaring Card Fraud and Social Engineering Scams in Sweden

Sweden’s renowned payment system, known for its safety and trust, is facing a daunting challenge as financial crimes, primarily card fraud and social engineering, are on the rise. According to the Swedish National Council for Crime Prevention, these types of fraud are the most prevalent crime category in 2023 [1].

Rising Trend of Card Fraud and Social Engineering

Fig. 1: Card Fraud and Social Engineering Fraud on the Rise [Preliminary Statistics, Source: Swedish National Council for Crime Prevention]

The upward trend in card fraud and social engineering scams highlights the importance of increased vigilance and action against financial criminals. In 2023, the number of reported card fraud cases increased by 44% compared to the previous year, while social engineering fraud incidents displayed a similar upward trend [1].

Social Engineering: Caller ID Deception and Phishing

The Swedish Bankers’ Association reported that social engineering, specifically via telephone calls and text messages, poses a major risk, particularly to the elderly population, who are often targets for these scams [2]. Phishing tactics, such as claiming to be a bank representative, aim to deceive victims into sharing BankID credentials or offering other sensitive information [2]. More than half of Swedes received scam text messages, and one percent of these attempts were successful, resulting in fraud [2].

Measuring Up Against Social Engineering

Responding to this surge in social engineering, Swedish banks and the Swedish Bankers’ Association joined forces to raise awareness and educate the public through the Svårlurad initiative [2]. They have also proposed measures to combat social engineering, including implementing a fraudster register and regulations against phone and mobile number manipulation (spoofing) [2]. Nordea additionally offers savings accounts with delayed withdrawals, allowing customers to halt potentially fraudulent transactions quickly [2].

The Swedish Government’s Commitment

Financial crimes have gained priority in the Swedish government’s agenda. Finansinspektionen is tasked with examining how payment service providers can prevent fraud, while the Swedish Post and Telecom Authority was assigned to counteract spoofing to lessen the impact on scams and fraud [3]. The outcomes of these missions are due for release on May 31, 2024 [3]. In February 2023, the Government also met with the leaders of Sweden’s major banks to discuss preventive measures against elder abuse in conjunction with financial fraud [3].

Card Fraud: Online Transactions and Increased Risk

An earlier implementation of strong customer authentication for online card transactions reduced card fraud. However, the upward trend in reported incidents mainly relates to online transactions where the fraudster possesses the stolen card details but has yet to obtain the physical card [1]. Therefore, online banks enable clients to disable online card usage when suspicious, allowing them to only use it for in-person transactions [1].

Decline of Counterfeit Banknotes and the Role of Cash

The number of counterfeit banknotes reported has significantly decreased from 6,629 in 2020 to 2,179 in 2023 [4]. Despite Swedish banknotes’ high security features, counterfeits tend to be simple replicas, making them relatively easy to distinguish from genuine notes [4]. However, the reduced usage of cash in Sweden raises concerns over the public’s declining familiarity with authentic notes, subsequently increasing the risk of counterfeit money spreading [4]. The Riksbank maintains that the eradication of cash should not entirely impede its usage and suggests amount limitations to hinder criminal activity [5].

[1] Swedish National Council for Crime Prevention. (2023). Annual crime statistics [2] Swedish Bankers’ Association. (2023, February). Measures to Counteract Social Engineering Fraud [3] Swedish Government. (2023). Information to the media [4] Riksbank. (2023, March 27). Facts about Swedish banknotes and series protection measures [5] Riksbank. (2023, March 27). Payment and economic conditions