Sweden’s transition to a cashless society has led to an unexpected consequence – a surge in digital crime. The country, which has gone further in ditching paper money than almost any other in Europe, is now grappling with a rise in online fraud and economic crime.
The shift to electronic transactions began after a wave of armed robberies in the 1990s. However, this move has opened up new avenues for tech-savvy criminals. In 2023, criminals siphoned off 1.2 billion kronor through digital scams, doubling the figure from 2021. It’s estimated that the size of Sweden’s criminal economy could be as high as 2.5% of the country’s GDP.
One such victim of these scams is Ellen Bagley, a 20-year-old from Linkoping, Sweden. She was defrauded of over 10,000 Swedish kronor ($1,000) after falling for a scam on a popular second-hand clothing app. The fraudsters used sophisticated techniques to make their scam appear legitimate, exploiting the trust placed in the widely used digital authorization system, BankID.
In response to the rising digital crime, Swedish authorities are pressuring banks to enhance security measures. However, striking a balance is challenging. Over-regulation could slow down the economy, while inadequate measures could erode trust and harm legitimate businesses.
The situation in Sweden serves as a cautionary tale for other countries moving towards cashless economies. It highlights the need for robust security measures and public awareness to prevent the rise of a “Silicon Valley for criminal entrepreneurship,” as described by Daniel Larson, a senior economic crime prosecutor in Sweden.
Read more: fortune.com