Belgium’s FSMA registers 61% jump in CFD and Forex fraud reports
Belgium’s Financial Services and Markets Authority (FSMA) has registered an increase in reports about fraudulent online trading platforms in 2020.
Last year, the Belgian regulator received 1,555 reports by consumers concerning fraud and unlawful offers of financial products and services. This represents an increase of nearly 30% over 2019 and of nearly 50% over 2018. This increase can be explained in part by the fact that more and more consumers are contacting the FSMA before investing whenever they have reason to suspect that an offer being made to them may be fraudulent.
Out of 1,555 reports made by consumers to the FSMA in 2020, around 74 % were about fraudulent online trading platforms, false offers of credit and fraudulent offers of wealth management, alternative investments or pyramid schemes.
The phenomenon of fraudulent online trading platforms increased significantly in 2020. These platforms offer trading in binary options, CFDs and forex as well as cryptocurrencies. Their activity has surged since May 2019.
The FSMA estimates the losses sustained by victims of fraudulent online trading platforms to be at least EUR 18.5 million between May 2019 and December 2020.
These trading platforms try to lure consumers via scam ads on social media. In these fake ads, a well-known person often explains how to get rich quick. These methods or projects often form part of the offer of a virtual currency or training course. After clicking on the ad and having given their contact details, the victims are usually swiftly called by fraudsters presenting a concrete investment proposal (in shares, alternative investment products, cryptocurrencies, etc.).
The staff of these firms act very aggressively. Scammers even try to persuade the victims to allow them to take control of their computer remotely in order to make certain money transfers. The fraudsters also try to convince the victims to invest increasingly higher amounts of money.
An increasing number of consumers contact the FSMA as a preventive measure whenever they have the least doubt. As a result, the regulator has been able to intervene more quickly and to inform the judicial authorities sooner than before. Thus, in 2020 the Belgian judicial authorities blocked access from Belgium, at the FSMA’s request, to 84 websites making fraudulent offers.