FinTelegram has repeatedly pointed out that many of the fraud cases involving illegal broker schemes would not be possible without the negligent or deliberate involvement of banks and payment service providers (PSP). These banks and PSPs accept bogus companies as customers without the required KYC and AML checks. Customers of illegal brokers consequently make payments in the millions to the bank accounts of those bogus companies which forward the monies to the ultimate perpetrators. The banks and PSPs are thus involved in fraud and money laundering. Some banks have probably recognited this problem by now and start to take actions, the German Spiegel reports.
Due to increasing fraud, some cooperative banks block payments with direct banks such as N26 or Fidor. The Volksbank apparently suspects that the strongly growing N26 fintech startup does not check its customers and their transactions properly. Apparently, there have already been corresponding fraud attacks against Volksbank clients.
“The Volksbank Freiburg has temporarily suspended payment transactions with the direct banks N26, Fidor,
It is the fintech’s KYC approach which is criticized by the bank. This would be insufficient and would open the door to the customers of traditional banks for fraudsters. “The background is that these banks are currently being used by alleged fraudsters as a target account for alleged crimes on the basis of simple identification procedures such as photo identification – outside Germany, for example,” the spokesman explained. With online photo identification, customers only have to send a picture of themselves and their identity card to the fintech.