Misuse of NemID is ravaging the loan market

The loan market is being haunted by criminals these years, and more of the scams are taking place online. In a highly digitalized society like ours, it gives them a greater path to act on, while the digital methods make it difficult to reveal the tricks and find the masterminds.

Tricked to hand over NemID information

The spam typically starts with the perpetrators getting hold of a person’s NemID card, username and code. This can be done, for example, through software installed on public computers in the library or by contacting the person directly. Here, the criminals pretend in emails or calls to be the bank or the police and ask for the information under the cover that the person is being hacked.

It also happens that the victims themselves hand over the information for a fee, for example because they do not have full insight into what a NemID is, and what it can be used for.

NemID is a universal key for scammers

Once a person’s NemID information has fallen into the hands of the scammers, the possibilities are many. For example, they can order a new code card and then monitor the victim’s address so that they can fish it up when it is delivered in the mailbox.

With the new NemID, scammers can approach lenders and apply to set up credit cards, accounts or loans. They most often use online lenders who can not verify the identity of the applicants in the same way, and Covid-19 has only made the possibilities better.

Creative methods of the digital scammers

Almost all lenders require ID information and information on an applicant’s income to set up a loan. Here too, digital developments has helped criminals by making it easier to edit photos of passports and health cards. With the victim’s NemID, they can also access the annual statement, increase the income, and send it as a pdf file to the lenders. Other criminals are now so adept at image manipulation that they themselves produce fake payslips to get a positive credit rating from lender.

The latest scam in car finance

One of the places where large sums of money are being scammed is in the field of car financing. The fraud number often goes like this:

The scammers find a newer, more expensive car that a private person has for sale on the internet. They approach the seller and pretend to be buyers who want to see and test drive the car.

During the visit, the fraudsters gain access to the registration certificate, which they find in the glove compartment, for example, and write down the codes on it. With these codes, they can re-register the car to the fictitious buyer – the person on whom they have NemID information.

Now the scammers contact a lender and send a homemade end note on the car, photo ID and manipulated financial information about the fictitious buyer. After this, a mortgage is registered in the car, and the ringleaders are paid the fictitious purchase price against security in the car.

The real owners of the cars are not informed in the process and often only discover the scam when they want to sell the car themselves. Only here do they become aware that debt has been taken up in the car in the name of a third party – who is thus unsuspecting fictitious buyer.

Lenders will often have a hard time maintaining the mortgage on the car, and the fictitious buyer typically cannot repay the money, which is long gone with the scammers.

So, who should repay the loan?

Unfortunately, the scam is often only discovered so late that it is impossible to roll back the transfers. The questions then is whether the fictitious buyers are obliged to repay the loan and whether they are capable of it at all. Here, one of the decisive factors will be how the perpetrators have gained access to the person’s NemID.

In 2019, the Supreme Court handed down two decisions on fraud with NemID, in which the cases concerned whether the victim should repay the money to the lenders. The Supreme Court emphasized how the scammers had obtained the victims’ NemID, and whether they were to blame for the misuse. It is thus the specific situation that determined whether the victim will pay back the large amount of money or not.

If you are interested in hearing more about how you can protect yourself against fraud, please do not hesitate to contact Partner, Attorney Kristian Ambjørn Buus-Nielsen.

This article was originally published in In§igt No. 25 in December 2021.