Consequences of unlicensed fraud: punishment, fines, and help

Unlicensed fraud directly leads to criminal prosecution by the Public Prosecution Service. The perpetrator risks a severe prison sentence, high fines, and a professional ban imposed by the Dutch Authority for the Financial Markets (AFM). Victims often suffer major financial damage through schemes such as pyramid schemes or illegal investing without supervision. Reporting to the Police and Fraud Help Desk is essential for investigation and possible compensation through civil proceedings.

Criminal consequences and sanctions for illegal activities

Trading without AFM approval often leads to severe criminal prosecution. The Public Prosecution Service (OM) does not view this merely as an administrative error, but as a serious risk to financial integrity. Victims of such practices must realize that recovery is complex, while the perpetrator risks being imprisoned.

Maximum sentencing and imprisonment

The judge determines the sentence based on the severity and scale of the damage. In complex cases, such as managing millions without authorization, this can result in a lengthy prison sentence. The Criminal Code provides the legal framework in which offenses such as fraud and forgery are defined and punished. Because fraudsters often use falsified statements to mislead new investors, the punishment is aggravated by the proven intent. A prison sentence is therefore a realistic scenario when the fraud is structural and large-scale. In serious cases, prison sentences may be imposed.

Amount of fines and financial sanctions

In addition to deprivation of liberty, the court often imposes high fines. This imposition of fines serves as an additional sanction alongside the prison sentence and depends on the amount of damage caused. The Public Prosecution Service (OM) demands these penalties to compensate for economic damage and to create a deterrent. For victims, however, this does not automatically mean they will get their money back, as fines go to the state. The amount of the fine imposed varies greatly per case, but can run into hundreds of thousands or more in large-scale pyramid schemes.

Professional ban and deprivation of rights

Judges can issue a professional ban to prevent recurrence in the financial sector. This ban means that the convicted person may no longer offer or manage investment services. Within the Criminal Code, such measures are aimed at protecting market integrity. A professional ban is often linked to the deprivation of certain rights, which effectively ends the fraudster's career in this sector.

The role of the AFM and DNB in supervision and enforcement

In cases of unlicensed fraud, the Dutch Authority for the Financial Markets (AFM) and De Nederlandsche Bank (DNB) intervene directly to safeguard market integrity. Illegal providers are placed on warning lists and subjected to strict enforcement under the Financial Supervision Act (Wft). This regulation is essential because investing without supervision leads to significant financial risks for consumers.

Intervention in case of suspected fraud

The Dutch Authority for the Financial Markets (AFM) acts as a watchdog for the financial markets. As soon as signals of illegal investment services are received, the AFM starts an investigation. Upon confirmation, the regulator places the party on the AFM Warning List, directly informing consumers about the lack of a license. In addition, the AFM can take administrative measures or hand the case over to the Public Prosecution Service for criminal prosecution. This proactive approach is crucial, as unlicensed service providers often do not comply with transparency obligations, which facilitates abuse.

Criminal liability for operating without a license

Offering financial services without the required authorization is a clear violation of the Financial Supervision Act (Wft). This law states that every financial service provider, such as an investment firm, needs a license from the AFM or DNB. Operating outside this framework is not just an administrative error, but a criminal offense that can lead to high fines or imprisonment. The legislature established these strict requirements to protect the interests of investors against unnecessary risks arising from a lack of control.

Checking licenses and registers

Consumers can ensure their safety by consulting the Warning Register of De Nederlandsche Bank (DNB) and the AFM lists before investing. De Nederlandsche Bank (DNB) specifically supervises banks and insurers, while the AFM focuses on investment services. By checking these registers, you avoid parties operating in the shadow of supervision. Ignoring these checks increases the risk of participating in pyramid schemes or other forms of fraud where recovering money is virtually impossible.

Identifying fraudulent schemes and risks

In the case of unlicensed fraud, the core issue is that investors often lose their money permanently. Without supervision by the AFM, any form of deposit guarantee is lacking, making recovery virtually impossible. Criminals exploit this gap to inflict major financial damage on victims through fraud and forged documents.

Risks of investing without a license

The greatest danger is the total loss of the investment. Because illegal providers operate outside the legal framework, there is no safety net in the event of bankruptcy or mismanagement. Victims of cryptocurrency fraud are particularly vulnerable because transactions are irreversible and wallets are often anonymous, which blocks civil recovery. Financial damage can run into millions of euros, while the perpetrator goes personally bankrupt without this settling the debts.

Characteristics of pyramid schemes and social engineering

A pyramid scheme is a specific form of investing without a license where returns do not come from profit, but from new participants. Typical characteristics are high, guaranteed returns funded by deception with falsified statements. This scheme falls under fraud as defined in the Criminal Code, as it involves intentional deception for unlawful gain. Note: here too, cryptocurrency is often used to mask cash flows and prevent traceability.

In addition, perpetrators frequently make use of social engineering. In this process, criminals psychologically manipulate victims to gain trust, for example by posing as successful traders or trusted advisors. This technique bypasses rational warning signs and makes victims more susceptible to transferring money to unverified accounts.

Consequences of identity fraud

In addition to direct financial loss, one risks identity fraud. Perpetrators steal personal data such as BSN (citizen service number) and passport copies to incur debts on behalf of victims or engage in illegal activities. This leads to letters from debt collection agencies and potentially a criminal record for the victim. Resolving identity fraud is time-consuming and requires reporting to the police and the CMI immediately. Always protect your data with two-step verification to minimize these risks.

Step-by-step plan for victims: reporting and seeking help

In the case of unlicensed fraud, immediate action is crucial to limit further damage. First of all, victims must file a report with the Police, as this forms the basis for a criminal investigation. In addition, registering with the Fraud Help Desk is essential for practical advice and monitoring new fraud trends. Although recovery is complex, these steps offer the only real chance of legal recognition and potential compensation through civil routes.

Reporting to authorities

The first step is submitting an official report to the Police. This can be done online via politie.nl or by phone. The Police register the case and determine if there is sufficient reason for a criminal investigation. For complex, cross-border cases where perpetrators hide behind foreign entities, the local unit often calls in the National Police - National Investigation and Operations Unit (LOD). This specialized unit has the expertise to dismantle international networks of unlicensed illegal providers.

In parallel to the police report, reporting to the Fraud Help Desk is strongly recommended. The Fraud Help Desk acts as a central knowledge center that advises victims on damage control and refers them to the correct agencies. By sharing your experience, you also help flag new fraud methods to the Ministry of Justice and Security. If there is identity abuse, a report to the Central Identity Fraud Point (CMI) is necessary. The Central Identity Fraud Point (CMI), managed by the RvIG, registers these incidents to combat identity abuse and works closely with the Police in investigations.

Difference between a notification and a police report

The distinction between a notification and a police report is legally significant. A notification, for example to the Fraud Help Desk or the Central Identity Fraud Point (CMI), primarily serves to register the incident and warn others. The Central Identity Fraud Point (CMI) uses this data to analyze patterns of identity fraud, but does not initiate criminal prosecution.

Filing a police report, on the other hand, is a formal legal act that enables the Public Prosecution Service (OM) to prosecute. Only through a formal report can the Police use coercive measures, such as freezing funds or arresting suspects. Without a formal report, the case remains outside the criminal law domain, making the chance of recovering money through compensation in the criminal proceedings virtually zero.

Recovery and forensic investigation

Unfortunately, recovering money in cases of unlicensed fraud is extremely difficult because these parties often operate outside the Dutch legal system. Civil proceedings are costly and have little chance of success against shell companies. In some cases, victims can join class actions organized by collective action organizations. These bundle claims from multiple victims to increase pressure on the perpetrator and share litigation costs, although success is not guaranteed.

For individual victims, the focus remains on damage control. Consult a Forensic Accountant to assess whether assets are still traceable. A Forensic Accountant specializes in reconstructing cash flows and identifying hidden assets, which can be essential for a successful civil claim. Remember that prevention and prompt reporting to the Police and Fraud Help Desk are your best defense against financial losses.

About this article - Editorial guidelines

📝 Drafted by: Sarah Weber (Casino Tester & Bonus Analyst)
🔍 Verified by: Dr. Markus Hoffmann (Senior iGaming Compliance Analyst)
📅 Finalized: 2026-08-26.

This article about "what happens in case of unlicensed fraud" was written by Sarah Weber and content-checked by Dr. Markus Hoffmann. Both regularly update the content in response to changes in regulations, licenses, and bonus terms. All references to licenses, regulators, and legislation link to public sources (the local gambling authority, the applicable local gambling law).

About the author

8+ years of experience reviewing casinos, 200+ personally tested platforms in the EU and worldwide. Former member of the eCOGRA Player Advocacy Program (2018-2022). Specialization: wagering requirements, withdrawal procedures, and customer service evaluation.

About the reviewer

More than 12 years of experience in the iGaming industry, including 5 years as a compliance consultant for licensed operators in multiple regulated markets. PhD in economic mathematics. Focus areas: bonus mathematics, wagering analysis, and player protection systems.

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Legal notice

De informatie in dit artikel is uitsluitend bedoeld voor redactionele en vergelijkingsdoeleinden en vormt geen juridisch advies. Spelers zijn zelf verantwoordelijk voor de naleving van lokale regelgeving.

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