Last year, con artists pocketed a minimum of €15.5 million from the residents of Latvia.
In the heart of the Baltic region, Latvia is grappling with an alarming surge in fraudulent activities. The four largest banks in the country, Swedbank, SEB banka, Citadele, and the Latvian branch of Luminor Bank, are at the forefront of this battle.
According to Mārcis Pelcis, Head of the Fraud Control Working Group of the Finance Latvia Association and Head of Security at SEB banka, one million euros is saved every month due to the banks' vigilance, but the same amount is defrauded. This stark revelation underscores the scale of the problem.
The most common scams are carried out over the phone or via text messages, with fraudsters pushing the right buttons to manipulate victims, regardless of their education or profession. The State Police has arrested over 100 "money mules" involved in money laundering last year, a testament to their relentless efforts against these criminal activities.
However, the origin of these fraudulent call centers is often outside Latvia, with the State Police choosing not to disclose the countries where the suspended call centers were located.
The increase in fraud cases is evident, with 2023 seeing a total of €12.662 million defrauded, a 5.2% rise from the previous year. This trend continues in 2024, with a reported €15.5 million stolen from the public, setting a new record.
The Finance Latvia Association reported the prevention of a significant amount of fraud cases in 2024, but the exact number of prevented cases is not disclosed. Olļegs Filatovs, Deputy Head of the Cybercrime Combating Department, reiterates that anyone can become a victim of fraud.
The Baltic region, including Latvia, Estonia, and Lithuania, has historically faced significant Anti-Money Laundering (AML) compliance challenges. Swedbank, one of Latvia's largest banks, was fined €347 million in 2020 for AML compliance failures related to its Baltic operations. Similarly, Estonia's Danske Bank branch was involved in a massive money laundering scandal.
The global environment since the COVID-19 pandemic has seen surges in fraud and money laundering, with international AML fines rising to $2.2 billion by 2022. Specific to Lithuania, economic stress in the construction sector could indirectly indicate increased financial crime risk, though not explicitly bank fraud.
Technological and operational challenges in AML compliance remain an ongoing issue for banks, with growing cybercrime reported globally and an urgent need for technology-driven fraud detection solutions.
Fraudsters use a variety of methods, including investment fraud, payment order fraud, dating fraud, fake lotteries, and email fraud (phishing). Scammers exploit people's weaknesses, not targeting specific groups of people.
Despite the challenges, Mārcis Pelcis remains optimistic, stating that the data indicates an unfortunate increase in fraud cases every year, but also a corresponding increase in the efforts to combat these activities. He emphasizes that Latvia is not unique in experiencing fraud, as such incidents can be seen worldwide, with similar trends observed in Lithuania and Estonia.
In the face of these growing challenges, it is crucial for individuals and businesses to remain vigilant and educate themselves about the various scams and fraudulent activities to protect themselves and their assets.
- The EU continually monitors the surge in fraudulent activities, like those in Latvia, relating to general-news and crime-and-justice, as the global finance landscape becomes increasingly vulnerable to such crimes.
- In light of the escalating fraud issues, businesses in the Baltic region, particularly those in finance, such as Latvia's Swedbank, SEB banka, Citadele, and Luminor Bank, are working diligently to combat fraud and prevent losses estimated to be around one million euros per month.
- International organizations, such as the Finance Latvia Association, emphasize the importance of education for both individuals and businesses in identifying and resisting various fraudulent activities, including investment fraud, payment order fraud, dating fraud, fake lotteries, and email fraud (phishing), across European countries like Latvia, Estonia, and Lithuania.
