According to the announcement issued by the Austrian Financial Market Authority (FMA) in reference to investigations of unauthorized businesses conducted in 2016, there has been 162 investigations total. As a result, there have been 33 warnings issued against providers and 49 criminal complaints.
The goal of the preventative actions is to remove fraudulent providers from the Austrian financial market and ultimately provide a safer environment for traders.
FMA reminded that in case that financial services that require a valid license are being provided without the possession of such an authorisation from the Austrian Financial Market Authority, the businesses which are providing such a service will be sanctioned on the grounds of a legal breach. In a situation that the sanctions for whatever reason, cannot be enforced, the FMA will issue warnings against the provider in question.
There has been such a case in 2016 when the FMA published an investor warning against a certain Peter Müller who was not authorized to provide banking transactions that require a license in Austria. After the FMA issued the aforementioned warning, it was established that Austrian traders have already forwarded payments to this person. Charges were therefore pressed following the breach of trust or fraud.
It was concluded that the person in question was a Czech citizen who had already transferred the money into private accounts in other foreign countries.
One of the recent attempts from the financial providers to draw in new traders has been the promises of unrealistic returns. It needs to be noted that high double and even three digit returns mentioned on some of the companies websites are either completely false or can possibly be earned only by taking extremely high risks.
The FMA’s Executive Directors Helmut Ettl and Klaus Kumpfmüller commented that the warning as an instrument has proven to be very effective in the fight against fraudulent activity. They have advised the general population to always check if there are possible warnings made against the provider they are thinking about registering with.
If there have been warnings issued, one should completely avoid any business relationship with the provider in question, and inform the FMA about the offer they have potentially received. This results in quick sanctioning of the providers who do not follow the obligatory framework and the potential damage can be minimized or avoided altogether.