Sweden's Cyber Fraud Surge Amidst Cashless Revolution
TapTechNews, June 24th. Sweden, known for its security, has seen a surge in cyber fraud and digital crime cases in recent years with the widespread adoption of cashless payment, putting the country's security situation on red alert.
According to Fortune, 20-year-old Swedish girl Ellen Bagley was scammed on a second-hand clothing trading platform and suffered heavy losses. The scammer disguised as a buyer, sent false information through the platform and guided Bagley to click the link and verify with the commonly used electronic signature system BankID in Sweden. Due to Bagley's failure to carefully identify the authenticity of the information, 10,000 Swedish kronor (TapTechNews note: currently about 6,914.6 yuan) in her account was stolen.
Bagley is just one of many cyber fraud victims in Sweden. Sweden is one of the countries with the lowest cash usage rates in Europe and even globally. In 2022, only 8% of Swedes used cash in daily consumption. According to the data of the International Monetary Fund, Sweden, like its neighbor Norway, is the country with the least number of ATMs per capita in Europe. At the same time, cyber fraud cases have increased explosively. In 2023, the loss caused by cyber fraud in Sweden was as high as 1.2 billion kronor (TapTechNews note: currently about 1.253 billion yuan), twice that of 2021. More worryingly, law enforcement agencies estimate that the scale of cybercrime has reached 2.5% of Sweden's gross domestic product (GDP).
The Swedish authorities are aware of the seriousness of the problem and are urging banks to strengthen security measures to curb the rampant trend of cybercrime. However, this requires a delicate balance between convenience and security. Excessive strict security measures may reduce transaction efficiency and is not conducive to economic development; while overly loose supervision will fuel the arrogance of criminal behavior and damage public trust.
Cybercriminals take advantage of complex networks of fake companies and forged documents, not only cheating consumers out of their money, but also profiting through the Swedish welfare system. Veteran economic crime prosecutor Daniel Larson called Sweden the 'Silicon Valley of criminal entrepreneurship', pointing out that the huge profits brought by cybercrime are the hotbed of gang activities and will further lead to violent conflicts.
Sweden's large-scale implementation of cashless payment started in the 1990s when armed robbery cases soared. The launch of the BankID system further accelerated this process. This system came out in 2001 and was initially jointly developed by Swedish banks to make electronic payments faster and more convenient. Users only need to complete various daily transactions, such as tax filing and purchasing bus tickets, through six-digit passwords, fingerprints or facial recognition for identity verification.
The popularity of BankID has facilitated people's lives to a certain extent, but it has also made it a tool for cybercriminals. For example, scammers use fake companies for money laundering, turning illegal income into legal income and then defrauding bank loans and welfare benefits. Prosecutor Larson expressed outrage at this, believing that it's equivalent to exchanging criminal proceeds for state pensions.
Data from the Swedish National Crime Prevention Council shows that from 2014 to 2023, welfare fraud cases in Sweden have doubled. To combat such crimes, the Swedish government has established a new agency this year dedicated to tracking welfare payment errors.
The Swedish National Bank admits that some of the promotional slogans in the wave of demonetization may have gone to extremes, simply linking cash use to crime. However, the convenience of the BankID system also leaves loopholes for criminals. The system is like an electronic signature, once used, it means the transaction is completed and cannot be revoked.
The Swedish government is also considering launching a national digital identity verification system to enhance security.
Swedish banks are also introducing additional security measures such as requiring authorization from a trusted second party for large transfers, but most of these measures are optional operations. Peter Göransson, a senior security adviser to the Swedish Bankers Association, said finding a balance between security and convenience is an ongoing challenge. He believes that the transaction speed may slow down as a result, but this is in line with the actual needs, and believes users will understand.
Some voices call for banks to take greater responsibility when customers are defrauded. Currently, Swedish payment service providers only cover about 10% of the losses. The Swedish Financial Supervisory Authority recommends learning from the UK's practice and requiring banks to compensate customers who have been deceived into transferring funds starting from October this year.
In the absence of similar regulatory measures in Sweden, the likelihood of victims like Bagley recovering their losses is very slight. She can only raise people's awareness of fraud prevention through social media and encourage other victims to speak out bravely.