Financial fraud

The CSSF has recently been receiving an increasing number of messages, information requests as well as complaints from consumers with respect to unscrupulous service providers offering their services in Luxembourg. In most cases, these providers are fraudsters who pretend to be a serious and supervised entity in order to steal money from their victims.

Given the current circumstances, the CSSF recommends the consumers to increase their vigilance when they receive attractive financial offers and to apply the following recommendations:

1. Unsolicited contact: You are contacted by phone, mail or email in an unsolicited manner and are offered financial services (for example, investments, advice, loans, participation on stock exchange platforms, etc.).  
2. Advertisement with a quality label or authorisation certificate: The service providers tout their products using quality labels, the logo of the CSSF or of other supervisory authorities.
3. High profits or returns: The providers promise you high profits or returns which are significantly greater than the other comparable offers.
4. Short deadlines: You have to make a decision rapidly and preferably immediately on the pretext of it being a unique and exclusive offer. The provider pressures you with frequent follow-ups.
5. Trial investment: First, you are offered to try by investing a less significant amount than the amount initially planned. Often, the returns on small trial investments are high because the aim is to persuade you to invest higher amounts. Once you have invested a significant amount, the providers often disappear.
6. Providers coming from exotic countries: The provider offers services in Luxembourg but is established in an exotic country.
7. Foreign telephone numbers: The provider pretends to be established in Luxembourg but calls you from abroad or uses a special phone number or a call centre.
8. No request by the provider for information on your personal situation or needs: The provider submits you offers which are “ideal and made-to-measure” without requesting beforehand information on your personal situation, your needs or your investment objectives.
9. Inconsistent contractual documents: The provider presents you with contractual documents containing inconsistencies (names, logos, services or contact details which are different, etc.) or many spelling and/or typing mistakes.
10. Lack of information on the product: The product is not clearly described and the provider struggles to answer questions about the product.
11. Ambiguous contracting party: The documents do not clearly indicate the identity of your contractual partner.
12. Duration and exit clause are unclear: It is unclear when and how you will receive the invested amount back or how you can terminate the contract.
13. Commissions and fees: The commissions and fees in relation to the investment are not clearly described or are much higher than those of other providers.
14. Deposits: The provider requires you to pay a deposit in order to cover the costs, fees or expenses (such as, for example, management fees, customs fees, taxes, unblocking or establishment fees, etc.).
15. Transfer abroad: You are asked to transfer money to foreign bank accounts while the provider is not established there.
16. Transfer to the attention of unknown holders of accounts: You are asked to transfer money to bank accounts which are not held in the name of by the provider.

Please note that by taking into consideration the points mentioned below, you may identify most but not necessarily all unscrupulous providers. In some cases, the reliability of a provider can only be ascertained through a verification by the supervisory authority. Such verification may, if necessary, take several days.

1. Ask the provider questions about the company (such as, for example, the company name, the registration number, the address, the telephone number and the competent supervisory authority) and about the offered product. Be firm when the provider does not react or if the provider only gives scant information, and do not invest before having obtained all the requested information.
2. Verify the provided data on a search engine beforehand: You may get a first idea on the consistency of the data provided by the provider through a search on a search engine, like Google or Bing. Verify that the data which were transmitted to you correspond to the results of the search and refer to the opinions of other users.
3. Verify the provided data on the Registre de Commerce et des Sociétés: A lot of information registered on the Registre de Commerce et des Sociétés is available for free. The business registers of other European countries may be consulted on the portal of the European Union.
4. Verify the provided data on the websites of the supervisory authorities: If the provider informs you that it is supervised by a supervisory authority, it is recommended to search said provider on the website of the supervisory authority concerned. The CSSF has a search application on its website, which allows you to search for providers that are supervised by the CSSF or registered with it. The authorisations of entities of the Luxembourg insurance sector may be verified on the website of the Commissariat aux Assurances. In this regard, it is necessary to verify that the provider’s activities and the presented authorisations correspond to the authorisations indicated on the supervisory authority’s website.
5. Follow the warnings which are published by the supervisory authorities or other authorities: The supervisory authorities and other authorities frequently publish warnings when they are informed of a fraud attempt. The warnings published by the CSSF and other authorities are available here.
6. Contact the supervisory authority: Contact the supervisory authority if you have any doubt concerning the reliability of the provider. The supervisory authority will be happy to answer your questions and to confirm if the provider is indeed supervised and if the contact details are correct. The supervisory authority is, however, not able to give you advice on the meaningfulness of the offer. In order to speed up the processing of your request, please provide the supervisory authority with any information you received from the provider.

Please send your request at the following address: direction@cssf.lu.

One fraud which is currently widespread consists in the detailed copy of websites of supervised entities in order to attract the consumer to these fake websites. Often, on these fake websites, only the contact details are replaced or the denomination is slightly altered. In order not to become a victim of such fraud, you may take the following precautions:

• Ensure, based on the website address, that you are on the website of the searched company;
• Consult the phone book in order to verify the telephone number indicated on the website;
• A foreign telephone number or a special telephone number which is provided as a means to contact a Luxembourg entity is often an indicator of fraud attempt.

Moreover, the CSSF noted that the fraudsters increasingly create complete websites on which the denomination of an entity established in Luxembourg is misused. In that case, they often use denominations of entities which contain an addition such as, for example, Invest, Management or Advisory and which do not have websites. Be careful when:

• the entity has existed for years but the website has just been created;
• as contact details, there is only an email address, a single foreign telephone number or a special telephone number;
• you enter the indicated telephone number on Google and it appears on other websites;
• on the website in question, the logo of the CSSF or of another supervisory authority is included in order to point out the quality of an entity or of the presented products;
• the content of the website is vague and contains spelling and/or typing mistakes;
• the content of said website is so general that it may be used for other entities.

In the context of cold calling, fraudsters randomly call existing telephone numbers in order to offer allegedly unique investments. They apply psychological tricks in a targeted manner to lure victims into investing. A serious entity would never contact you in such unsolicited manner. Consequently, if this happens, please end the telephone conversation immediately and do not conclude any contract.

• Do not accept any offer made to you in an unexpected and unsolicited manner and end all contact with the provider;
• Carefully read the documents which were transmitted to you;
• In case of doubt, ask the provider questions;
• Take your time before making any decision to invest and refuse to sign under pressure;
• Before deciding to invest, research the provider and verify its reliability as mentioned above;
• Compare, where possible, the offers of different providers;
• Ensure that the proposed investment corresponds to your investment objective;
• Verify the provider’s data by comparing them to independent information sources;
• Keep in mind that, in general, fraudsters dangle high profits and returns in order to incite their victims to carry out transfers.