Latvia cracks down on prepaid card fraud amid surging digital payments
Latvia has seen a sharp rise in prepaid card usage over the past five years, driven by digital payment growth and budget-conscious consumers. These cards, favoured by seniors, low-income individuals, and tourists, have also become a tool for fraudsters, prompting new regulations to tighten oversight.
The surge in prepaid card registrations reflects changing payment habits, with many users opting to buy new cards instead of topping up old ones for cost reasons. Others rely on them for short-term ads, avoiding the need to share permanent contact details. Parents and travellers also find them convenient for children's first phones or temporary use.
However, the rise has brought challenges. State police report that around 40% of detected crimes now involve unregistered prepaid mobile cards, a figure that continues to climb. Telephone fraud alone made up 55% of all fraud cases last year, with 6,479 incidents recorded.
In response, the Ministry of the Interior introduced stricter rules, including tougher customer identification and enhanced transaction monitoring. Financial institutions now work more closely with the Financial and Capital Market Commission (FCMC) and law enforcement to combat money laundering and fraud. The ministry consulted mobile operators and NGOs before finalising the changes, arguing that the long-term benefits—such as reduced fraud—will justify the costs.
Oskars Fīrmanis of Tele2 supports the government's efforts but points to Lithuania's experience, where a similar registration system failed to cut fraud significantly.
The new measures aim to curb fraud linked to prepaid cards while balancing convenience for legitimate users. With stricter checks and cross-agency cooperation, authorities hope to reduce criminal activity without discouraging those who rely on prepaid services for everyday needs.
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