According to the latest annual report from the Autorité des marchés financiers (AMF) and the Autorité de contrôle prudentiel et de résolution (ACPR), online scams are becoming increasingly common, particularly in the areas of life insurance and crypto-assets.
Noting a significant rise in Internet scams, the authorities have added 150 names to their blacklists of unauthorized sites and entities. A fifth list dedicated to crypto-asset derivatives has been created, already featuring 77 sites.
Crypto-asset scams
In their 2018 report, the AMF and ACPR warn users about the increase in Internet scams, mainly in the field of crypto-assets. Indeed, after Forex, rare earths and diamonds, scammers are targeting investments in Bitcoin and other crypto-currencies. To do this, they don't hesitate to create fake platforms by impersonating well-known players. Attracted by the returns on offer, many investors fall into the trap, losing their life savings in the process. Last year, the authorities recorded 55 million euros in reported losses.
At the end of May 2019, the ABEIS (Assurance banque épargne info service) website counted 750 names of fraudulent sites, including 200 linked to crypto-assets.
Misleading life insurance advertising
The AMF and ACPR have also warned of the rise in misleading advertising in the life insurance sector. The fall in returns on euro funds has logically led distributors to promote their unit-linked policies. However, savers are not sufficiently informed about the risk of capital loss, which is often mentioned in footnotes. This lack of information concerns SRI (Socially Responsible Investment) funds in particular, where the societal impact is presented in greater detail.
Advice unsuited to savers' needs
Customer self-assessment of financial knowledge is also one of the practices condemned by the financial and insurance authorities. The authorities have condemned the MCQs to be completed on bank websites to determine the investor's profile. These players are required to ensure that their customers are in a position to bear any losses, given their financial situation. Lastly, in their report, the AMF and ACPR consider that advisors are failing in their duty to advise and understand clients' objectives by encouraging them to subscribe to products with a 3-5 year holding horizon.
A one-stop shop for consumers of financial and insurance products
The two authorities have announced that this year they will launch a working group with financial sector players to study their commercial practices towards vulnerable elderly people, whose savings are generally more substantial. These people, who are particularly targeted by telephone canvassing, need to be carefully monitored.
To help consumers make sense of the many financial and insurance products on the market, the AMF and ACPR have set up a one-stop shop. It includes a blacklist of unauthorized players, as well as practical information and advice. Users can ask questions online via the telephone platform. More than 750,000 visitors consulted it in 2018.