Financial scams—how to identify and avoid fraud

Since the start of the pandemic, many of us have spent long hours connected to our computers and cellphones. While some forms of crime have decreased during lockdown, others have unfortunately become more prevalent, including online scams and fraud. 

Due to the global pandemic, the number of fraud attempts has exploded. The uncertain economic context, health concerns, lockdown restrictions, and the explosion of online commerce are all factors that may have contributed to the massive increase in online and phone-based scams. You can find a guide to online safety on our blog, but read on to get an overview of financial scams and how to spot them.

The goal of fraudsters is simple—they want to steal your money. To do this, they try to get you to invest in fake financial products in order to gain access to your bank account details, or to transfer them money. But just like phishing attempts, financial scams can also be aimed at retrieving your personal information.

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There are various types of common financial scams. Here’s a roundup of information from the Assurance Banque Epargne Information platform, set up by the Banque de France, the ACPR (Prudential Control and Resolution Authority), and the AMF (Financial Markets Authority). 

Offering so-called “savings products” is a common scam, where someone gets in touch to offer you a unique investment opportunity. They’ll likely contain suspicious conditions, such as “guaranteed” exceedingly high interest rates of up to 15%. Investments may also be presented as “risk-free”. The goal here is to gain access to your personal information, or to get you to pay large sums of money to the fraudster directly. 

Investment scams are varied and often involve financial investments with very high rates of return. Fraudersts may assume the identity of a viable financial institution, or suggest alternative investments in atypical goods or precious materials, for example. 

Some fraudsters may contact you with an offer for a loan with conditions that you would never expect from a real bank or credit institution—think low rates, very long repayment periods, and no conditions. Fraudsters who offer this type of loan often offer quick repayment.

First, they’ll likely ask you for a first payment to cover supposed costs. Once the transfer is made, they’ll take the money and run. 

More and more scams involve someone impersonating a bank or a financial institution to offer fake products, often going so far as to fraudulently use the identity of the bank’s actual employees to reach out to their victims by telephone and by email. 

In some cases, the fraudster will pretend to be an employee from an institution or an administrative body—such as the CAF or Pole Emploi. These fraudsters may attempt to steal your identity after they collect your personal information, then make transfers or take out loans in your name once they gain access to your bank accounts.

When reading your emails or answering your phone, here are a few red flags to watch out for:

• Someone posing as N26 or another bank that offers you financial services by email or phone
• Emails or phone calls that offer very profitable financial products, such as exceptionally high interest rates
• A company or an individual contacts you to recommend a third party, who supposedly has investment expertise
• Someone claims that you're one of a selected few to be offered an attractive financial service
• Someone contacts you to request your bank details and other personal information, or the payment of a lump sum of money
• You’re informed that whatever financial product you’re being offered is approved by some public authority
• You’re told that your bank or credit institution requires you to sign a new contract following a name change on their end

Basically, if it sounds too good to be true, it probably is.

The French authorities have provided a list of trusted organizations that allow you to check whether the person contacting you is authorized to offer financial services such as savings or credit. Among them are the REGAFI, ORIAS, and the GECO database. All these sites and databases list approved establishments. For atypical investments, the Autorité des Marchés Financiers (AMF) also provides a white list of approved bodies.

Furthermore, French authorities also publish a blacklist of establishments and published alerts of fraud attempts, as do ABEIS and AMF.

At N26, your account security is our highest priority, and we go to great measures to protect our customers every step of the way. However, like many banks or financial institutions, we are sometimes confronted with fraud attempts.

The techniques used by fraudsters are more and more sophisticated, and it can sometimes be difficult to detect fake emails, texts, and phone calls. This is particularly true when fraudsters impersonate trusted financial institutions as part of their scam.

Here are some things to keep in mind that can help you to avoid malicious attacks: 

• N26 will never contact you by email or phone to personally sell you financial products
• You can only sign up to N26 products via the mobile N26 app, or the N26 WebApp—we’ll never ask you to sign up via phone, mail, or email
• To date, N26 doesn’t offer any investment products or savings accounts in France

If you receive a fraudulent phone call, don’t answer any questions or give out your personal information, and hang up. If you receive a suspicious email, never click on any of the links  if you have the slightest bit of doubt about its authenticity.

If you are approached by someone who claims to be an N26 employee, or if you receive a suspicious email or SMS from N26, please contact Customer Support right away. You can contact N26 Customer Support via your N26 app, or the N26 WebApp. If you’re not an N26 customer, you can also get in touch with us via the live-chat function available via our Support Center.

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If you think you’ve received a fraudulent email or phone call, we recommend reporting it on the Ministry of the Interior’s website. You can find more information here. If you’ve been the victim of a scam or financial fraud, please report it right away. To do so, go to the government website: https://www.pre-plainte-en-ligne.gouv.fr/.

You can also contact “Info Escroqueries”, a free hotline in France dedicated to fraud and scams. The number is 0805805807 and they’re available Monday to Friday from 9:00 am to 6:30 pm CET.

To learn more about online security and how to protect yourself, check out the Technology & Security section of our blog.