Sharp increase in investment fraud this year
Netherlands residents are increasingly falling victim to investment fraud, with over 13 million euros in damages already reported this year, regulator AFM and the Fraud Helpdesk said on Monday. They expect total damages to be 30 percent higher than last year, Het Financieele Dagblad reports.
Investment fraud damages increased for three consecutive years. Two years ago, this type of fraud caused 10 million euros worth of damages. That increased to 13.2 million last year and 18 million euros this year, the regulators expect.
Victims of investment fraud often respond to a misleading advertisement or are approached by email to invest in various products. "Great returns are promised, but in the end, nothing or little is paid out, and those victims often lose a lot of money," the AFM and Fraud Helpdesk said in a joint statement.
Investment fraud reports increasingly mention cryptocurrency and contracts for difference (CFDs) - investment products that allow you to speculate on a rise or fall in a currency or share price. According to the AFM and Fraud Helpdesk, the threshold for investing in these products is low, but they are still complex products with which about 80 percent of investors lose money in a short time.
CFD investments are legal, but both organizations consider their providers fraudulent, partly due to their aggressive marketing, often using illegal advertisements featuring celebrities who do not know about the ads.