Fraud in Cyprus

FINANCIAL CRIME INVESTIGATION UNIT

This Unit at Police Headquarters deals with cases of fraud that are committed in all Police Divisions. It investigates serious and complex cases and responds to requests by foreign countries for information and co-operation concerning the investigation of cases of fraud.
The Unit investigates cases that are submitted by Police Units and Government Services to the Commander of Department C.

A) Advice on the prevention of fraud committed via the Internet, mobile telephones and post

- A key factor in the prevention of fraud is being cautious and suspicious of any letter, unsolicited e-mail, or sms which comes from an unknown sender.

- If you receive a message or letter saying that you have won the lottery abroad and you are asked to send your personal information so that you can receive the so-called amount won, do not respond. Just ask yourself - who or what organisation gives away large amounts of money for free? No one.

- If you receive a message or letter saying that you have inherited property abroad and especially in Africa, don’t believe it. Even if they ask for help to transfer from Africa, property that supposedly belongs to you for an exchange, do not respond, even out of curiosity.

- If you receive a message from your bank saying that for some reason they want to supposedly check your bank account number or the number of your credit card or pin numbers, do not believe it. Your bank will never contact you in this way about such matters. If you respond, you run the risk of not being compensated by the bank. It is better to contact your bank immediately, in another way, to verify the claim.

- Be aware of the fact that you run great risks when you make online purchases. If you don’t know the suppliers avoid making such purchases. If it is absolutely necessary to purchase something, verify before paying, that the particulars / information given by the seller are not bogus, so that you can contact him/her later if s/he fails to fulfil the agreement made.

- If you are selling something over the Internet, do not agree to accept payment by cheque or credit card. There is a great possibility that they are forged or stolen and you will have to pay compensation later.

B) On-Line Buying and Selling

It is the most common form of fraud on the Internet. In such cases various so called buyers or sellers appear on the Internet. The two most common goods bought and sold on the Internet are cars and mobile telephones. When the fraudsters receive the money, they do not send the products(s). It is then virtually impossible to find them because in all cases the particulars and information they give not only on the Internet but also to banks and transfer offices are false.

Fraudsters usually:

- Appear to be selling goods at prices that are much lower than usual so that they can attract customers

- Contact the victim initially by e-mail

- After the initial e-mail, they communicate with the victim by telephone or further e-mails

- Pretend to be the owners and use various names. They therefore manage to trick their victim. It is then impossible or extremely difficult to track them down.

- Use, not only various names, but also titles like “Company Director”, making the whole procedure appear to be more “formal” and “official”, really “convincing” the victim.

- As far as the sale of vehicles is concerned, fraudsters send, by e-mail, fake registration documents to the victim describing the vehicle.

- In order to achieve their goals and deceive victims, they use the websites of so-called transfer companies which guarantee the “safe” collection of money on behalf of their “customers” when the payment is made by the victim. These websites immediately disappear from the Internet and cannot be traced except in cases where fraudsters attempt again to cheat their victim, providing him/her with even more fake information. If they feel that their victim will continue to pay, they tell them all sorts of lies, such as “the Customs Authorities must be paid”.

- Tell the victim to pay through the WESTERN UNION (WU) or by depositing the money in some bank account. In this case offenders use or “rent” the bank accounts of students or unemployed persons who receive a small amount of money in exchange for the use of their bank account by someone else. These persons usually act as bearers, receiving instructions from the offenders to immediately withdraw the money that was deposited in their account and to send it to them, (deposit it in their account) usually using the Western Union.

- If the payment is made to a company, a straw or legal one concerned with the collection of money on behalf of third persons, the money is usually transferred to Eastern Asia and later back to Europe or Africa.

Advice: Don’t forget that there are many risks involved in buying goods on- line, over the Internet. If you don’t know the suppliers avoid such purchases. If it absolutely necessary to do so, before paying make sure that the suppliers’ particulars are not fake so that you can find him/her if case the terms of agreement are not met.

Internet Fraud

Introduction Technological developments and especially advancements in computing and the wide use of the Internet have brought about great changes in everyday life both in private life and the workplace. As a rule, this development has improved our quality of life as we can have access to unlimited information which is useful in education, business and communication.

However, the use of the Internet just like every sector of human activity can be taken advantage of by those involved in new forms of criminality, like child pornography, illegal gambling, identity theft, business data and record theft, industrial espionage and various forms of fraud.

The most frequent offence committed on the Internet is Fraud and the various forms it takes. The offenders aim at obtaining amounts of money in an easy, quick manner.

Definition Generally the term “Internet Fraud” includes any form of fraud in which offenders use e-mails and websites to present to Internet users various fake sites with the intent to defraud and make financial gains.

The danger of not being aware All Internet users are potential victims of Internet fraud and this is a temptation for fraudsters that are covered by anonymity. Offenders do not have to go out looking for victims but can easily “phish” them. Indeed, in most cases individuals become victims without even being aware of it. There are also others who, despite suspecting that something is wrong, they take risks because they are attracted by the unknown. Offenders take advantage of the fact that Internet users are not aware of the risks they run if they enter an unknown web-site, respond to a message send by someone unknown or “click” to take an unknown path. Therefore, Internet users have to be informed to take their own safety measures, in co-operation with their suppliers. Prevention is therefore most important because when someone loses his/her money, it is difficult if not impossible to get it back. Finding the offenders is difficult because they do not present their real identity - the addresses they give are fake or non-existent and their telephone numbers are not registered (so-easy card).

Origin This type of fraud occurs world-wide but it is more common in countries with high standards of living like the United States and European countries where the Internet is widely used. Offenders come mainly from African countries, especially Nigeria, from Eastern European countries, South East Asia and China. They do not only operate within their countries, but they have expanded to various countries, mainly the USA, Holland and Spain. The Nigerians especially, have created their own “school” which is known throughout the world as the “Nigerian Mafia”. They are usually well-educated persons who are forced to leave their country because of its bad economic state.

Cyprus There doesn’t appear to be a serious problem in Cyprus but there has been an increase in the number of complaints. It is believed that there will be a great increase in these complaints in the future. Cyprus Police considers this area important, and in order to protect Cypriot society, it has set up a special office at Police Headquarters which investigates this type of cases as well as other types of cyber crime, such as child pornography, an offence which has unfortunately been increasing.

No Cypriots have as yet been found to be guilty of this type of crime. There have been cases though where Cypriots have been victims of fraud from abroad and some cases have been reported to the Financial Crime Investigation Unit at Police Headquarters. It is believed that many persons have fallen victim to Internet fraud but have not reported it to the Police out of embarrassment at being cheated. This is the case world-wide so it is difficult to know the true extend of Internet fraud.


The main forms of Internet Fraud are the following:

Identity Theft and “Phishing”

In such cases fraudsters create phony websites which look just like the sites of banks. The customers of these banks are asked to follow, step by step, certain instructions - they are instructed to enter their personal information, including their bank account number, credit card numbers and pin numbers. The sender asks users to “confirm” their personal information for made up reasons such as the bank is going through a process of improving or changing its security system. In this way fraudsters gain access to accounts that are connected to the Internet and immediately transfer amounts from the account of the unsuspecting victim to other accounts which are usually abroad. Usually these bank accounts are opened using false personal information. The accounts into which the money is deposited may also belong to intermediaries who are usually poor persons agreeing to the use of their accounts for a small payment. Having obtained personal information on bank cards fraudsters also make bogus cards in the name of the victims. They either use them themselves or sell them to others and withdraw money from automatic cash machines in third countries. These problems arise when banks and other organizations which accept Internet exchanges do not have satisfactory security systems or the victims themselves are not appropriately informed about the way their electronic accounts work.

It is very difficult to detect such cases. In one specific case, sums of money from Cyprus were transferred through the Internet to bank accounts in Latvia. Cypriot detectives went there and with the help of the Latvian authorities managed to find the person in whose name the sums had been transferred. It turned out that the person was homeless and that his personal information had been used for a small payment.

Investigators also find that in most cases, fraudsters have access to the Internet from Internet cafes.

Recently there have been seven complaints by a bank in Cyprus that considerable amounts of money had been stolen from the accounts of its customers through “phishing”, a similar way to the one described above. Investigations found out that this was done through Nigerian students who acted as intermediaries.

Buying and Selling

This is the area where fraud most commonly takes place. In these cases various sellers or buyers of goods appear on the Internet. The prises of the goods offered are usually extremely low so as to attract customers. Communication is carried out through e-mail and fraudsters ask to be paid either by a bank payment or through an international courier. When they receive the payment, they don’t send the goods. Locating them is virtually impossible because in all cases the information they give on the internet, concerning banks and transfer offices is fake.

In the case of purchasing, fraudulent buyers order the goods from legitimate companies which accept payment by credit card or cheque. These cards or cheques however prove to be fake. In some cases the payment is made by a cheque of a larger amount than the price of the goods bought and the fraudulent buyers ask for the return of the excess amount.

Advance fee fraud

This type of fraud includes the case involving the well-known fraudulent letters sent by the Nigerian Mafia. The fraudsters, up until recently, used to send letters by post or fax. They now send them by e-mail.

With these letters they try to deceive people through all sorts of lies. They tell victims that they will supposedly offer them huge amounts of money if they help them transfer money, diamonds and other riches from inheritance in Africa to the victim’s account for safekeeping. Initially they ask for bank account information and then for an advance fee for expenses. If you respond you lose your money and the senders disappear and cannot be traced since the information they gave is false. In one case, a Cypriot was tricked into going to Holland. There they showed him fake bank offices where he deposited approximately 30000€ supposedly to be used as expenses for the transfer of a large inheritance from Africa to Holland. The Dutch authorities said that such cases were very common and they only record them, they don’t investigate them because it is impossible to find the offenders. Other similar cases of fraud are those involving money supposedly won in a lottery. These letters usually come from Spain and Australia and inform the receiver that he/she has won a large amount of money. If there is a response, then the fraudsters ask for an advance fee for the transfer of the fictitious “winnings”.

Romance Scam

It is one of the most recent types of fraud, but it is developing fast. In this case crooks take advantage of people’s loneliness and wish to find a partner. They supposedly take on the role of intermediary on the Internet. Initially, in order not to arouse suspicion, they ask for a small amount of money, supposedly for some small expenses. They then ask for more money, supposedly for more expenses, such as the travel expenses of the “groom” or “bride” that never comes.

Credit Card Fraud

There are various ways in which credit card fraud can occur. These are:

(1) Theft of personal information – the pin number on automatic Teller Machines is stolen by being recorded by special equipment or a small camera. This is the most widely used method in Cyprus.

(2) Entrapment of credit cards in Automatic Teller Machines and use of special equipment and small cameras simultaneously, so that the code number is monitored. As soon as the user leaves the vicinity, the offender withdraws the card and uses it him/her self.

(3) Theft of cards and code numbers by various skillful persons and immediate use of the card by the thief. The cards are stolen from post boxes, cars or bags.

(4) Copying/stealing card information and using it immediately or transferring/copying it to new empty cards. This is done when customers pay for goods or services. Those responsible are the persons selling the goods, waiters etc.

(5) Stealing the card number when a customer pays for goods in shops or other places.

(6) Theft of information on cards, over the Internet.


Protection Measures

If a card is lost or stolen, then the owner must immediately contact his/her bank and JCC. Special care and caution should be taken when using credit cards in Automatic Teller Machines. If there is any suspicion of the presence of any foreign object in any machine then the bank and the police should be informed immediately. Card owners must make sure that no persons unknown to them are around when using a card.

Card owners should keep their receipts so that they can check their accounts on a monthly basis.

A pin number should always be memorised and not written anywhere.

Card holders and users are advised to use the special cards issued by banks when carrying out transactions on the Internet.

Investment Fraud: Advice to Investors

In recent years, in Cyprus and abroad, there have been a number of persons, physical or legal, who offer various investment plans which finally prove to be bogus. These plans usually offer extremely high capital returns, which cannot be feasible.

Fraudsters usually

- Try to sell complicated monetary products which cannot be easily understood by consumers. Do not allow persons unknown to you to handle your money.

- Try to impress people by dressing elegantly and appearing to be successful businessmen and businesswomen.

- Make you feel uncomfortable. They take advantage of your feelings making you feel greedy, insecure, unhappy, and discontent with your self and your knowledge and abilities to handle money matters.

- Don’t forget that investments are liable to risks. If they offer an investment plan and promise you that there are no risks, you should ask yourself if this is in fact true.

Remember that once fraudsters achieve their aims, they disappear together with your money.


How to Protect Yourself

The only way to protect your self from becoming a victim of fraud is to be extremely careful. When you don’t know something, seek advice from experts. Examine carefully the investment plans offered to you and find out about the specific person(s) you are dealing with. Don’t forget: “The best protection against fraud is being knowledgeable and cautious.”

Remember that the smart investor:

- Knows or finds out the names of the people s/he is dealing with or who they represent

- Does business only with persons and companies s/he knows and trusts

- Keeps record of conversations, meetings, noting important points mentioned as well as the names, dates and times they took place

- Seeks and finds information on the persons and companies with which s/he is about to deal with

- Verifies the information s/he gathers

- Makes sure that s/he fully understands the terms and conditions of the investment plan

- Asks for a detailed explanation on anything that s/he does not understand

- Makes certain that the company is legal by referring to the relevant inspection authorities – the Central Bank of Cyprus, the Stock Market and the Inspector of Insurance Companies

- Does not give away any personal information or any information regarding his finance or other personal matters before s/he certifies that the company is legal

- Does not make rush decision

- Never hesitates to ask questions. The more questions he/she asks, the better

- Asks for information on a regular basis, keeps up-to-date on the progress of his/her investments and always follows his/her investment goals

- Reports to the relevant Inspection Authorities any attempt(s) of fraud against him/her.

If something appears too good to be true, then there is every possibility that it isn’t.

For further information for investors you can refer to http://www.cysec.gov.cy