Fintech Fraud Scandal Uncovered in Germany
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Another fintech scandal has erupted in Germany, with police making several arrests to break up alleged fraud and money laundering networks. The scheme detailed by authorities as part of “Operation Chargeback” led to damages totaling more than €300 million.
The criminals operated through payment firms, and police say they suspect former employees at “four big German payments providers” had knowledge of the fraudulent activities, or even cooperated. None of the firms were named.
Payment firms have been under increased scrutiny in Germany. A few months ago, French provider Worldline was hit by allegations that it had ignored warnings and continued to do business with prohibited and other high-risk customers in recent years.
The BaFin regulator had also been cracking down on upstart financial companies since the Wirecard scandal half a decade ago shook the country.
UK Chancellor of the Exchequer Rachel Reeves was hit with a productivity downgrade at the worst possible time. The Office for Budget Responsibility, whose forecasts underpin UK budgets, lowered its estimates for UK productivity by 0.3 percentage points. That’s poised to hand Reeves a hit of as much as £20 billion ($26 billion) just as she’s preparing to present a budget likely to involve unpopular choices.