Financial Fraud as a “Growth Industry”: Record Losses and New Scams According to the Austrian Financial Market Authority
The Financial Market Authority (FMA) is sounding the alarm: financial fraud has developed into a real “growth industry”. According to the authority's latest figures, the total loss reported by financial fraudsters in 2024 amounted to around 15.5 million euros - an increase compared to the previous year, when the figure was 12.8 million euros. The dramatic increase in crypto-based fraud cases is particularly worrying. According to the FMA, the majority of these fraud cases could indicate that illegal financial markets are increasingly attracting the attention of criminals.
The FMA issued a more frequent warning to investors in 2024, highlighting the growing issue of financial fraud on trading platforms. / Picture: © Wikimedia Commons; Startac, CC BY-SA 3.0 Unported DEED (https://creativecommons.org/licenses/by-sa/3.0/deed.en)
In 2024, a total of 840 people contacted the FMA's consumer hotline. This is significantly more than in previous years. The highest reported loss by an individual amounted to a staggering 996,109 euros. One striking trend that is being observed more and more frequently is the high financial losses, which can lead to significant life changes for those affected.
Fraudulent trading platforms, which mostly operate via the Internet, are the main factor behind the rising number of reports. “We are seeing a trend where fraudsters are becoming more sophisticated and creative. Fraud is reaching new dimensions and we have to react faster and faster to protect our fellow citizens,” explained FMA Executive Director Helmut Ettl.
Crypto fraud as a new focus
The massive increase in crypto-based fraud cases is particularly noteworthy. The number of these cases more than doubled in 2024: from 244 to 409. This trend reflects the increasing popularity of cryptocurrencies, which are being used by criminals as terrain for illegal activities. Bitcoin, Ethereum, and other digital currencies not only offer fraudsters the opportunity to make high profits but also the advantage of anonymity, which makes detection more difficult.
The FMA emphasizes that crypto investments that advertise unrealistically high profits and minimal risk are a clear indication of fraud. “Anyone investing in crypto should always check exactly which provider they are investing with and not be seduced by tempting promises,” says FMA Executive Director Eduard Müller.
New record number of investor warnings
The FMA published a total of 145 investor warnings in 2024 - a new record. By comparison, there were only 84 in 2022 and 106 in 2023. These warnings are mainly directed against fraudulent trading platforms that offer financial products such as securities, derivatives, and cryptocurrencies without having the necessary licenses.
The warnings have been published on the FMA's official website and the federal government's electronic announcement and information platform (EVI). The FMA encourages the public to regularly check for such warnings and to always turn to official sources if in doubt.
The use of new technologies: Deepfake fraud and fake celebrities
A particularly frightening trend in financial fraud is the so-called “celebrity scams”, where criminals use deepfake technology to create fake videos of celebrities. In these videos, victims are led to believe that the celebrity has become wealthy through secret investments and tips. These videos are deceptively real and often feature a person pretending to explain how they have profited from secret investment opportunities.
“Deepfakes enable fraudsters to deceive their victims on social networks by imitating supposed personalities such as politicians, entrepreneurs, or influencers,” explained FMA Executive Director Ettl. “The perpetrators use state-of-the-art technologies, but the scams are always the same: high profits with low risk, insider tips that are unknown to the banks. These temptations often lead to catastrophic financial losses.” The use of deepfake technology in the fraud space has drastically increased the efficiency of these tactics, making it even harder for victims to expose the fraudsters.
Warnings and protective measures: How investors can protect themselves
The FMA advises investors to always remain critical when investing in financial products and to exercise extreme caution, especially with offers that are distributed via social media or unknown platforms. It recommends always ensuring that the provider is properly licensed and seeking independent financial advice if in doubt.
Especially in times of technological innovations such as artificial intelligence and deepfakes, it is important to be well-informed. The FMA has provided comprehensive information and checklists for identifying scams on its website. These can help potential victims quickly recognize suspicious offers and avoid them.
A growing problem
The increase in financial fraud and the use of new technologies by criminals casts a gloomy light on the development of this industry. With a total loss of 15.5 million euros in 2024 and the doubling of crypto fraud cases, it shows that the FMA is facing a growing threat. However, the number of warnings and the authority's efforts to raise public awareness also show a response to this threat. It remains to be seen how successful these measures will be in combating this “growth industry”.