Economic crime in Germany is increasingly shifting to the Internet. Investment fraud cases are increasing on both websites and social media.
This is a result of the “Federal Situation Report on Economic Crime 2018”, which was published by the Federal Criminal Police Office (BKA). Overall, the numbers in the area of economic crime fell in 2018: 50,550 cases were registered by the police in 2018, a decrease of 31.8 percent compared to the previous year (2017: 74,070 cases). This significant decline in the number of cases is due in particular to proceedings conducted in Saxony in 2017 with more than 23,000 investment fraud offenses that were included in the statistics.
Regardless, the monetary damage caused by economic crime remains immense.
Although the amount of damage fell by 10.2 percent compared to 2017, it remained at a very high level at 3.356 billion euros. The perpetrators are increasingly relying on the Internet to advertise their fraudulent investment opportunities.
Social media is coming to the fore because this is how investors can be attracted with supposedly lucrative and uncomplicated investment opportunities. Accordingly, the number of cases in which the Internet was used to commit economic crimes increased by more than a quarter to 6,473 (2017: 5,105 cases).
These fraudulent websites offer financial products such as Contracts for Difference (CFD) or Initial Coin Offerings (ICOs). It is not obvious to many investors that these are dubious offers because the websites are professionally prepared:
In addition to an attractive appearance, they contain fake imprints and trading permits. In addition, the perpetrators often offer “customer service” in the form of a hotline. To the potential victims who are promised a high return, this appears as another sign of seriousness.
The possibility of direct telephone contact for fraudsters is the key to convincing victims of the profit potential of an investment. If investors transfer money to the perpetrators, account transactions and apparently high profits are displayed on the website. The victims then continue to invest - and only notice the fraud when they seek a payout. Even in such cases, the perpetrators are able to obtain additional money from their victims by speaking to them via the hotline. For example, small sums were paid out as proof of seriousness with the aim of persuading victims to transfer even larger sums. In fact, there is no investment in the advertised investment products. There is a total loss for investors.
The shame of the victims in such cases is great.
In addition, many investors don't feel cheated at all - the scam is so perfidious that the belief in its seriousness lasts for a very long time. Only the loss of all assets opens the eyes of some victims. With the aim of preventing such experiences, the Federal Criminal Police Office published warnings and was present at investor fairs to draw attention to these fraudulent offers. The BKA advises investors who are deceived to report them. This is the only way criminal prosecution is possible. This often leads to success in white-collar crimes: in 2018, the clearance rate for white-collar crimes was 90.9 percent (2017: 94.6 percent).
Further information on white-collar crime phenomena, examples of individual ways of committing crimes and police investigations can be found in the Federal Situation Report on White-Collar Crime 2018
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Source: BKA
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