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The Bank of Lithuania has raised an alarm over a significant increase in fraudulent activities targeting the consumer credit sector, in a new bulletin warning the public to be vigilant.
The regulator says it is working with consumer credit providers operating in Lithuania to better protect consumers from rising fraud risks.
"We have appealed to consumer credit providers to implement enhanced measures to help prevent fraud and protect consumers,” said Simonas Krėpšta, a member of the board of the Bank of Lithuania.
“In turn, it is important that the residents themselves especially protect their identification data, do not enter identification codes in unclear links received by SMS messages or emails or letters, and do not give fraudsters access to their accounts,” the official said.
The Bank of Lithuania has identified two prevalent types of fraud affecting consumers. The first type involves fraudsters convincing individuals to invest in fake "profitable investments", often related to crypto-assets. Victims are then tricked into borrowing money from consumer credit providers and transferring the funds to the fraudsters or crypto-asset exchange operators.
The second type involves phishing schemes. Fraudsters send deceptive emails or SMS messages with links, urging recipients to enter their identification details, such as bank account numbers, card details, or authentication codes. Unknowingly, victims end up approving consumer credit applications or signing credit agreements, resulting in significant financial losses.
The Bank of Lithuania has warned that consumers caught in these scams face severe financial repercussions and only realise the fraud when they receive overdue payment notices from creditors. They either lose money through authorised push payments to fraudsters or unknowingly sign up for consumer credit, with fraudsters embezzling the borrowed funds.
The Bank of Lithuania's investigations reveal that fraudsters predominantly target older, single Lithuanian residents, especially those nearing or in retirement who receive stable social benefits such as disability support.
In its bulletin, the Bank of Lithuania emphasises the importance of safeguarding personal banking information, and advises residents not to share sensitive details such as card passwords and codes, as well as to avoid clicking on suspicious links or being lured by offers of "risk-free" investments in complex financial instruments like crypto-assets.
The Bank of Lithuania also offers the "STOP Consumer Credits" service. By registering on this list, individuals can prevent others from taking out consumer credits in their name.
All consumer credit providers in Lithuania are obliged to check this list before finalising any credit agreements, and contracts with individuals on this list are deemed invalid.
As with many European countries, fraud has become an increasingly big problem for policymakers and legislators in lieu of rising digitisation.
In January 2024, the Bank of Lithuania published guidelines for preventing fraud to provide recommendations and examples of good practice based on the Bank of Lithuania's interpretation of the law and other legal acts.
These guidelines aim to help financial market participants notice, assess and reduce the risk of fraud, and aim to improve the general understanding of how fraud prevention measures should be implemented, strengthen the powers and influence of fraud prevention officers, and promote a uniform and consistent implementation of fraud prevention measures among financial market participants.
