Financial Crime World

Sweden Wakes Up to Alarming Surge in Financial Crimes: Fraud Soars, Social Engineering Schemes Prevail, and Card Fraud Threatens Trust in Payment System

Stockholm, Sweden - The following report explores the escalating trend of financial crimes in Sweden, specifically the surge in fraud cases, and the measures being taken to combat this growing threat to the nation’s vaunted payment system.

Fraud: The Fastest-Growing Category of Crime in Sweden

According to the Swedish National Council for Crime Prevention, fraud has emerged as the fastest-growing category of crime in 2023, as shown in Figure 1. The previous years saw decreases in card fraud and social engineering fraud, but those trends have been reversed.

Figure 1: Card Fraud and Social Engineering Fraud on the Rise

graph LR
A[2020]
B[Card Fraud: 6,629]
C[Social Engineering Fraud: 3,894]
D[Total Fraud: 10,523]
E[2021]
F[Card Fraud: 5,356]
G[Social Engineering Fraud: 3,460]
H[Total Fraud: 8,816]
I[2022]
J[Card Fraud: 3,652]
K[Social Engineering Fraud: 2,515]
L[Total Fraud: 6,167]
M[2023]
N[Card Fraud: 4,856]
O[Social Engineering Fraud: 3,296]
P[Total Fraud: 8,152]

A --B--> D
E --F--> H
I --J--> L
M --N--> P

Social Engineering Fraud: An Evolving Threat

Social engineering fraud, particularly via telephone, poses a significant threat, with the elderly population being disproportionately targeted. Fraudsters impersonate bank representatives to trick victims into sharing their BankID credentials or sensitive information via text messages or emails.

  • More than half the population received scam text messages in 2023.
  • About 1% of scam text messages led to completed fraud.

Banks Stepping Up Their Defenses

In response to the increasing threat of social engineering fraud, Sweden’s banking sector has taken measures to secure customers:

  • Svårlurad initiative: launched by the Swedish Bankers’ Association and banks to help raise awareness of risks and prevent frauds.
  • Lobbying for new regulations: fraudster register and rules to mitigate the impact of mobile and telephone number manipulation, or spoofing.

Government Response to the Surge in Fraud

Sweden’s government is taking steps to strengthen its response to fraud:

  • Finansinspektionen, the Swedish Financial Supervisory Authority, was asked to evaluate how payment service providers prevent fraud.
  • The Swedish Post and Telecom Authority was tasked with countering spoofing to limit fraud.

Card Fraud: An Online Menace

Card fraud has been on the rise in Sweden, primarily due to online transactions in countries where strong customer authentication is not required. To safeguard against card fraud:

  • Cardholders can close their cards for online purchases and reactivate them.
  • The government is working to enforce stricter regulations against online financial fraud.

Counterfeit Banknotes: On the Decline, but a Concern

Despite the robust security features of Swedish banknotes, the decline in the use of cash is causing concerns about the increasing prevalence of counterfeits.

Cash: A Double-Edged Sword in the Fight Against Crime

While cash offers anonymity and can be used for criminal activities, the focus should be on implementing amount limits to maintain the availability of cash transactions while making it harder for criminals to use cash for illicit activities.

The ongoing efforts to combat financial crimes in Sweden underscore the importance of collaboration between various stakeholders to maintain trust in the payment system and safeguard consumers.