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How do I recognise a risky situation?

Requests for personal and account information

Never give your information to an unknown caller, even if asked to do so because of the large sum of money to be transferred. Not even to a caller purporting to be the police. Always request a written offer with the service provider’s contact information clearly stated.

Investment tips, baseless promises

Information about investment objects sold with baseless promises is spread via internet discussion boards and newsletters, for example. Investment tips and attractive promises or offers may also come in the form of a letter.

It is difficult to investigate the real background of an investment tip. What appears to be an unbiased analysis may be partial and based entirely on fabricated data.

Offers without a prospectus

When securities are offered for subscription, the offer must be presented in the form of a prospectus that has been approved by authorities. A prospectus must be prepared even if securities are offered by a non-listed company.

Prospectuses can also be fabricated. It pays to be careful and to always check the authenticity of the offer.

You can check in the FIN-FSA’s prospectus register to see whether an authority has approved a prospectus. The FIN-FSA also keeps a list of known offers made without a prospectus.

Credit cards against payment

Appropriate bodies for granting credit cards are banks and credit card companies. As a rule, fees are charged for a card only when the card has been supplied to the customer.

Credit cards may be offered over the internet or by other means against payment. It is common that cards may also be granted to applicants with a history of delinquent payments. A card may be advertised in a misleading manner by using a well-known company’s product name even though there is no real connection between the two.

If the card provider does not seem to be reliable, it pays to be cautious. Be extra careful if payment for the card is requested before the card has been supplied.

Suspicious letters

Suspicious letters may arrive via email or regular mail.

Letters appearing to be official have been received particularly from abroad in recent years. Assistance is often requested for the transfer of inherited or other funds from one country to another. The writer asks the recipient to get in touch and promises significant compensation for this assistance. Prior to the transfer of money, the recipient is often asked to supply personal details. It is often requested that the recipient pay a sum of money to the sender as a kind of guarantee that the remainder of the money can be paid. Such requests for payment may be based on, for example, receiving a certificate of origin for money, currency exchange, repatriating money, paying legal fees or obtaining a central bank certificate.

A request for money may also come in the form of a chain letter. Many chain letters are based on a pyramid structure. High yields are promised for a very modest payment. New funds are transmitted higher up in the pyramid structure, which makes the activity appear lucrative. When the flow of money from the outside dries up, the pyramid collapses.

In such situations, it is common that there is no yield and any money paid out is lost.