Bank of Lithuania started to block websites offering illegal financial services
By the end of the year the central bank seeks to restrict access to nearly 70 sites that are used to carry out fraudulent activities and scam people out of their money.
“The scale of online scams and consumer losses has been increasing rapidly. Most often illegal financial services are offered and provided by entities operating outside the EU, which in the past made it difficult to reach and stop them. Now, however, we are able to block the websites that are used for fraud and protect the consumers,” said Vytautas Valvonis, Director of the Supervision Service at the Bank of Lithuania.
With Seimas adopting certain legislative amendments, the Bank of Lithuania, having been granted judicial approval, obtained the right to issue binding instructions for internet service providers to block the websites that offer Lithuanian residents illegal financial services, such as investment or insurance.
The same also applies in terms of marketing of illegal financial services – the Bank of Lithuania may order to remove such advertisements.
According to Bank of Lithuania data, since 2016 residents have lost at least EUR 1.5 mln due to illegally provided investment services, with EUR 680 thousand scammed in 2017 and almost as much over the five months of 2018 (EUR 670 thousand).
Typically the amount of money lost may reach several or tens of thousands of euros, sometimes – even hundreds.
Last year 80% of all investment service-related complaints received by the Bank of Lithuania were those regarding illegally offered or provided online investment services (usually investment in Forex markets or complex financial derivatives).
In most cases residents fail to adequately assess the risks involved or are even unaware of them and invest their funds in unknown instruments or financial pyramids, ultimately losing the majority (or sometimes all) of their money invested.
“For the most part, people are contacted by phone and offered the possibility to make a quick profit.
“Taking advantage of their willingness to make easy money, con artists convince their victims to “invest” not only their savings but also borrowed funds.
“So be cautious – do not give in to temptations, protect your money, and immediately notify the Bank of Lithuania of any suspicious services,” said Mr Valvonis. ■