In a press release dated 26 March 2020, the Autorité des marchés financiers (AMF) and the Autorité de contrôle prudentiel et de résolution (ACPR) warn investors against the risk of scams in the context of the coronavirus epidemic (Covid-19)^[1].

The joint press release states that “as part of their respective missions to protect savings and customers in the banking and insurance sectors, call on the public to be extremely vigilant with regard to the risk of scams in the context of the covid 19 epidemic and the downturn in the financial markets”.

Indeed, the regulators point out that scams can take different forms “for example, investment proposals presented as a safe haven through tangible assets (such as gold, precious metals, vintage wines or whiskies, etc.), which can be used as a means of protection against fraudulent practices”. ), bogus banking or insurance products with very attractive characteristics (high yield and absence of risk, rapid underwriting and lack of verification of the borrower’s profile, etc.), fraudulent calls for donations or investments in companies, whether listed on the stock exchange or not, that are supposed to benefit from the epidemic and see their value increase”.

The AMF and the ACPR note in particular the use by fraudsters of keywords linked to COVID-19 from which they make false statements, playing on factors such as the fear of the health crisis facing France.

In this context, the regulators reiterate the rules of vigilance to be observed before making any investment or subscription, and mainly that of never communicating one’s bank details and/or other personal data online on the Internet or by e-mail.

The risk of financial scams is obviously not the result of the Covid 19 epidemic, and the AMF regularly warns investors, as its Chairman, Robert Ophèle, pointed out in September 2019 in “La lettre de l’observatoire de l’épargne de l’AMF” (The Letter from the AMF’s Investment Observatory), stating that “AMF teams work hard on a daily basis to detect any suspicious or unauthorised bids and alert the public […]. However, the best defence against scams is the vigilance of the saver. It is unavoidable. The first reflex of prudence is simple: never forget that there is no such thing as a miracle investment and that there is no such thing as a high return without high risk”.

However, there is no doubt that the risk increases in a context of health crisis and uncertainty about the future, since in these times of confinement, two factors make scams more likely than usual.

Firstly, the French are surfing massively on the Internet, significantly multiplying the potential prey that scammers can tackle. Secondly, the fall in the markets (between 30 and 40% since mid-February 2020) leads many investors to imagine that after such a fall, there will necessarily be a rebound, and therefore, capital gains for those who invested at the bottom of the cycle.

These savers, who are generally novices, are therefore naturally easy prey for ill-intentioned people.

In this context of crisis, the government reminds, via its portal économie.gouv.fr that “Since the appearance of the first cases of Coronavirus, scams from malicious companies and individuals are multiplying”^[2].

In addition to warnings about vaccines, drugs, and exit certificates, the government also reminds us “to remain vigilant with regard to offers of financial investment. In the current context, these offers can take different forms: investments in so-called “safe havens” (gold, precious metals, wine, etc.) or advantageous investments in companies supposed to generate profits during the Coronavirus epidemic”.

In conclusion, before carrying out any transaction, the public is advised to check the reliability of the various sites and/or investment companies by consulting their approvals on the AMF and ACPR websites. The AMF has also drawn up a list of companies that have received a warning or have impersonated regulated market participants^[3].

In addition to subscribing to often fictitious products involving a capital loss for the investor, fraudsters also seek, through these malicious processes, to collect the personal and banking data of individuals, which will subsequently enable them to carry out various frauds.

[1] https://www.amf-france.org/fr/actualites-publications/communiques/communiques-de-lamf/lamf-et-lacpr-mettent-en-garde-le-public-contre-les-risques-darnaques-dans-le-contexte-de-lepidemie

[2] https://www.economie.gouv.fr/dgccrf/arnaques-liees-au-coronavirus

[3] https://www.amf-france.org/fr/espace-epargnants/proteger-son-epargne/listes-noires-et-mises-en-garde.