Financial Crime World

Swedish Finance Industry Combats Surge in Fraud Cases: Card Fraud and Social Engineering on the Rise

In response to a significant increase in fraud cases in 2023, the Swedish finance industry and government are taking decisive actions to maintain public trust in the Swedish payment system. Among various types of fraud, card fraud and social engineering have witnessed the most substantial growth.

Card Fraud and Social Engineering: A Growing Concern

Card Fraud and Social Engineering Fraud on the Rise

Preliminary 2023 statistics Download the data from the diagram Source: Swedish National Council for Crime Prevention

Social Engineering: The New-Age Con Art

Social engineering, primarily via telephone, has emerged as a leading form of fraud, with the elderly population being particularly vulnerable. Fraudsters pose as bank representatives, manipulating victims into providing sensitive information or authorizing transactions via BankID. Text message scams are also prevalent, resulting in nearly one percent of recipients falling victim to the scams.

Countermeasures: A Multi-Pronged Approach

Swedish banks, under the Swedish Bankers’ Association, have launched initiatives like the Svårlurad campaign to boost awareness and educate the public about how to safeguard themselves against fraud. The following measures have been taken:

  • Several petitions have been submitted to the Government in 2023:

    • Introduction of a fraudster register
    • Regulations to curb mobile and telephone number spoofing

  • Nordea Bank has introduced delayed savings account withdrawals, making it simpler for users to halt transactions suspected to be fraudulent.

Government’s Role: Strengthening Cooperation and Response

Examining Payment Providers’ Approaches to Preventing Fraud

The Swedish authorities, through Finansinspektionen and the Swedish Post and Telecom Authority, are examining payment providers’ approaches to preventing fraud and counteracting spoofing to minimize fraudulent activities. The results of these investigations are expected to be presented on May 31, 2024.

Enhanced Collaboration between Banks and the Police

The Government held a meet-and-greet with the bank heads in February 2023 to explore enhanced collaboration between banks and the police to tackle fraud against the elderly.

Card Fraud: Online Transactions Pose Threats

Sweden adopted the EU’s strong customer authentication for card payments, leading to a considerable reduction in reported card fraud cases. However, the recent rise in card fraud is primarily due to online transactions where fraudsters illegally obtain card details and execute purchases in regions without stringent authentication procedures.

Countermeasures

Banks offer options like disabling online card usage and reactivating it as needed to protect against such incidents.

Counterfeit Banknotes: Steep Decrease in Submissions

Since 2020, the number of reported counterfeit banknotes has plummeted from a record high of 6,629 to 2,179 in 2023, according to banknote and coin statistics. Swedish banknotes boast advanced security features, with the majority of counterfeits being simple copies easily distinguishable from genuine banknotes.

Countermeasures

Raising awareness about counterfeit detection remains critical to prevent their circulation.

Cash: Anonymity and Criminal Activities

Although cash can be used for money laundering and other illicit activities, Swedish authorities do not advocate eliminating it entirely. Offering consumers and businesses the choice to use cash is essential.

Countermeasures

Cash transaction limits can be a viable solution to preserve the option of making cash payments while hindering criminal activities.

The battle against fraud, criminal economy, and other financial crimes remains a top priority for Sweden. Ensuring the integrity and trustworthiness of the Swedish financial ecosystem is essential.