We regularly receive enquiries from potential clients who have been defrauded, mostly by criminals from Bulgaria, while the victims are in Germany, Austria or Switzerland. The methods used by the fraudsters vary considerably, and the financial losses range from a few thousand to several hundred thousand euros per case.

In light of recent events – yet another case of fraud – we have decided to describe some common types of fraud in this article, explain how you can protect yourself against them and outline the legal options available to you to at least partially compensate for the damage caused.

Why do so many cases of fraud originate in Bulgaria?

Several factors make it easier for fraudulent activities to be carried out from Bulgaria. Bulgaria is a member of the European Union and is therefore subject to the free movement of capital. Financial transactions can be carried out without any particular restrictions or delays, meaning that illegally obtained sums of money have often already been transferred before the damage is discovered.

In addition, it is relatively easy to set up a limited company in Bulgaria with minimal share capital. This possibility is sometimes abused by formally appointing third parties as shareholders, through whose accounts the obtained funds are transferred.

Another problem is the insufficient efficiency of the law enforcement authorities. Investigations are often delayed, and cross-border cooperation with foreign authorities is not always optimally organised. This makes it difficult to solve fraud cases in a timely manner and recover assets.  For this reason, we repeatedly advise clients not to attempt to file criminal charges in Bulgaria. However, they should definitely do so in Germany, as the police and public prosecutors in Germany act much more professionally.

Below are some common fraud methods that you should protect yourself against:

I. Hackers

This is a case of cybercrime. The perpetrators are organised and, according to media reports, originate from the former Soviet republics. They hack into the email systems of smaller companies with correspondingly weak protection mechanisms in European countries and quietly track email traffic. They then send these companies an invoice by email from an email address that looks deceptively genuine, like that of a real business partner – an invoice that looks like a normal invoice from the business partner, but with changed account details. The account holder is then a Bulgarian company. The unsuspecting employees of the victim company then transfer the requested amount of money to this account in Bulgaria.  Those affected often lose considerable sums of money because they react too late or make transfers without checking the payee.

How can you protect yourself against this? Payments should not be made on the basis of unverified invoices, emails or bank details – especially if the recipient is located abroad. At the slightest suspicion of fraud, legal assistance should be sought immediately and both the bank and the relevant authorities should be informed, as every minute of delay reduces the chance of blocking the accounts and recovering the sums paid. As bank accounts are usually emptied immediately after the incorrect transfer, the refund of funds is mostly a matter of luck – and only possible if immediate steps are taken, the relevant documents are submitted and the following procedure is followed.

In such cases, we always recommend taking action as quickly as possible within the framework of a so-called security procedure. This is a court procedure based on written documents, in which the court quickly issues a decision allowing bank accounts to be seized or frozen. This measure is usually the most effective way to secure any remaining funds.

Unfortunately, neither the injured parties nor their legal representatives can obtain information about bank accounts in advance, as banks do not disclose such information without a court or public prosecutor's order. Our experience also shows that banks in Bulgaria do not usually respond to mere reports of fraud from private individuals and often invoke banking secrecy.

For this reason, it is crucial to take early judicial protective measures to determine whether the money is still available. If it turns out that the accounts have already been emptied, this avoids unnecessary costs for further steps.

Of course, the police can also be informed at the same time, but experience shows that processing such reports often takes several days or weeks – time in which the fraudsters have usually already moved the funds.

To prevent such cases, we recommend protecting email systems with secure passwords, using up-to-date antivirus programmes and regularly training employees to recognise fake invoices or fraudulent messages.

II. Scams

These fraud cases often involve perpetrators from Bulgaria or Turkey with good German language skills who operate from call centres in these countries. They usually contact elderly people in Germany by telephone, feigning emergencies or official matters and persuading the victims to transfer money to the accounts of Bulgarian companies at . These funds are then withdrawn or transferred to other accounts. The amounts involved range from a few hundred to several tens of thousands of euros.

To avoid such cases, never transfer money to people who have only contacted you by telephone. If someone on the phone claims to be a police officer or public prosecutor and demands money to settle an alleged case, do not respond. In such cases, contact the local police in Germany immediately. Some fraudsters have become very inventive and prepare forged documents which, at first glance, may appear to be credible, complete with signatures and stamps.

If someone tries to convince you that they are from the police and that you should hand over or transfer money to them, be sure to request an official order from the police or at least make sure that the bank account number provided can be found on the official website of an institution, such as the local police station.

But even that is highly unlikely. Always be vigilant and remain suspicious.

III. False investments

In these cases, the perpetrators pose as stockbrokers or investment advisors and promise high returns on financial investments. After an initial transfer to an account belonging to a Bulgarian company, a supposed "customer account" is set up for the victims, through which they can track the alleged profit growth via a professional-looking online platform. The aim is to obtain further capital.

As soon as the "investors" try to request payouts, excuses follow – such as alleged fees, blocking periods or lack of liquidity. After that, contact usually breaks off completely. In fact, the promised investments do not exist and the money is lost.

Anyone considering investing in a Bulgarian company should definitely check it out in advance – in particular its company history, capital structure, staffing levels and, above all, whether it has a licence from the Bulgarian Financial Supervision Commission. If it does not have such a licence, all contact should be terminated immediately. Once the money has been transferred, it is usually irretrievably lost.

Lawyers are often unable to recommend legal action due to a lack of documentation, insufficient information and poor prospects of success. However, a solicitor can make an individual assessment for each specific case after reviewing the documentation.

IV. Estate agents

Many Britons who want to buy property in Bulgaria fall prey to fraudsters due to their lack of knowledge of Bulgarian law. Alleged estate agents advertise cheap properties online, present forged documents and estate agent contracts, and demand commission before the victim becomes the owner. Often, the estate agent disappears or the property is suddenly no longer available.

Do not trust empty promises about your future dream home if you have not even seen proof of ownership. In our practice, cases of fraud often begin with a person who is not the owner of the property concluding a preliminary contract with you and demanding money.

As you know from our several articles on buying property in Bulgaria, it is not illegal to sign a preliminary contract with a non-owner. However, you should be provided with documents that clearly show that the actual owner really intends to build on their land and then transfer the property.

This requires careful legal review – it may be a legally valid building right, or it may be, for example, two construction companies presenting internal agreements in the form of a contract. Even if it seems harmless at first glance, it is often no less risky than the cases described above.

There are so many different options here that the recommended course of action always depends on the specific individual case.

V. Rent sharks

Many foreigners in Bulgaria rent flats, including students and call centre employees, and sometimes encounter fraudulent landlords. A typical situation here is that the landlord insists on cash payments instead of bank transfers so that he can evade taxes on them. And when the tenant moves out, he is sued for payment of the rent because he cannot prove that he paid it.

Some important recommendations: A written rental agreement is essential. Rent and utilities should always be paid by bank transfer in order to have proof of payment. If cash payment is unavoidable, receipts should always be requested. Handover reports should only be signed if the condition of the flat is understood and accepted. In case of problems or discrepancies, legal assistance should be contacted immediately.

VI. Goods ordered, not paid for

In this type of fraud, companies with minimal capital are set up in Bulgaria for the specific purpose of committing goods fraud. The fraudsters first order small quantities of goods from retailers in Germany and pay for them in advance to build trust. Once the German retailer feels secure, a large order follows. When the goods are picked up, the victim is presented with a forged transfer receipt, claiming that the money will arrive soon, but in fact it never does. The goods disappear and contact with the supposedly reputable business partner is broken off.

To protect themselves from this, companies should carefully check their contractual partners in Bulgaria. Important aspects include the share capital, the number of employees and the sales history. An additional credit check, for example via Creditreform in Bulgaria, can provide further security. The goods should only be released once the purchase price has actually been credited to your own account at , and not on the basis of assurances or forged receipts. This is the only way to minimise the risk of loss.

VII. The Venus trap

The central issue here is more personal than legal, namely the exploitation of loneliness and the need for emotional closeness. The victims are mostly older, single men who desire affection and connection. Female fraudsters – some via chat rooms, some via the red-light district – build up a relationship of trust over a long period of time, exchanging messages and photos and creating an emotional bond. Once this trust has been established, the demands for money begin. Typical excuses include alleged debts, sick relatives or necessary renovations that need to be financed immediately.

The amounts range from small sums to several hundred thousand euros, depending on the situation and the psychological pressure on the victim. In chat cases, the sums are usually smaller, while in cases involving prostitutes, they are significantly higher. Fake documents are often presented to make the stories credible, and the perpetrators leave hardly any traces, making legal prosecution difficult.

The key preventive measure is: do not transfer money to people you do not know personally. If you cannot completely detach yourself from the emotional bond, you should request copies of ID cards, draw up loan agreements and only make payments via bank transfer to the respective person's accounts. No cash transfers, no Western Union payments. This is the only way to recover at least part of the money in an emergency.

The problem in such cases is often that, due to the close relationships that have developed between the parties, there is frequently no legally usable evidence. As already mentioned, the most sensible course of action in such situations is to initiate security proceedings.

One of the special features of this procedure is the requirement for convincing written evidence. Some of our clients believe that chat correspondence or a few photos would be sufficient to substantiate their claims. However, this is by no means the case.

A transfer via Revolut to an account under a first and last name is not sufficient to initiate proceedings if you do not have a copy of the person's ID, as we need the three names and postcode to complete the application.

Very often, fraudsters defend themselves in court proceedings by arguing that there was no agreement on repayment and that it was a gift.

This is an extremely crucial point in legal proceedings, and every single circumstance in the relationship between the parties can be significant. Leave no doubt that you provided the funds with an obligation to repay. Otherwise, even the slim chance of taking legal action against the other party cannot be exploited in court.

Even if you have followed all our advice and transferred the money by bank transfer after concluding a loan agreement and presenting convincing documentation, it is not uncommon for the account to be emptied and then closed a few days after the transfer.

However, if you have seen this article too late and have just realised that you may have been the victim of fraud, contact a solicitor immediately. Carefully sort through all the relevant facts and your entire correspondence. Think carefully about who might have witnessed the incident. If it is not too late and all is not yet lost, a good solicitor will suggest a suitable strategy and explain the associated risks clearly and comprehensively.