Swish and Bank-ID: Tools for Fraudsters? Swedish Authorities Crack Down on Financial Crimes

Sweden has seen a huge increase in the use of digital payment solutions like Swish and Bank-ID. However, these tools have also become favorite methods for committing fraud. Criminals have discovered new ways to exploit these platforms in conjunction with internet banks to gain unauthorized access to victim’s funds.

Surge in Telephone Fraud

Telephone fraud, also known as vishing or voice phishing, has seen a remarkable surge in the past year. The financial losses resulting from these scams are estimated to have grown by an astounding 186% during the first half of 2021, compared to the same period in 2020. To minimize the risk of falling victim to fraud, it is crucial not to disclose login details or passwords, especially not via the internet or over the phone.

Money Laundering with Swish

Money from ill-gotten gains frequently undergoes money laundering procedures involving Swish. Funds derived from fraudulent activities are transferred from one account to another or multiple accounts through Swish payments. Once the amount accumulates, it is then withdrawn in cash, converted to cryptocurrency, or used to purchase pricey assets - a practice known as layering. This technique aims to create as many layers of transactions as possible to conceal the origin of the tainted funds.

Use of Front Men

Another common tactic employed in money laundering is the use of front men - individuals who unwittingly permit others to use their accounts to mask the true origins of the funds.

Swedish Authorities’ Response

In response to the escalating threat of financial crimes, Swedish authorities have stepped up their efforts to combat fraud and money laundering. In June 2020, the police initiated a collaboration with the five largest banks in Sweden, known as SAMLIT (Swedish Anti-Money Laundering Intelligence Task Force). This partnership aims to pool information and resources to better tackle these sophisticated crimes.

To further strengthen the legal framework against financial crimes, a new crime classification was introduced in May 2021: unlawful dealing with payment tools. This classification will facilitate investigative efforts with respect to frauds associated with digital payment systems other than cash.

Continuous Battle

The battle against fraud and money laundering is a continuous one, and Swedish authorities remain committed to addressing these challenges to preserve the integrity of the financial system and protect consumers.