Police forces share warning after 'clone firm' investment scams rose last year
By Matt Hall | 27th January 2021
Gloucestershire Constabulary is sharing a Financial Conduct Authority (FCA) warning to the public as reports of 'clone firm' investment scams increased by 29 per cent in April 2020 when the UK first went into national lockdown.
This warning comes after a number of residents were targeted by this scam with one man losing £75,000 after liaising with someone posing as Aberdeen Standard Investments.
Action Fraud data shows that consumers reported losses of more than £78 million between January and December 2020 with this being an average of £45,242 when investing with fraudsters imitating genuine investment firms.
So, what is a 'clone firm' investment scam? 'Clone firms' are set up by fraudsters using the name, address and 'Firm Reference Number' (FRN) of real companies authorised by the FCA.
The criminal gangs running these scams can engage with victims through a number of channels such as adverts on social media platforms and search engines.
Victims will then click on these adverts and be taken to exact replicas of websites belonging to genuine investment firms.
Once victims have registered their interest, they'll be contacted by the fraudsters, who often obtain the names of genuine employees of investment firms and create seemingly legitimate company email addresses, but with very subtle changes.
The returns being promised by these criminal gangs are often modest so as not to arouse suspicion, but slightly better than the market rate, therefore appealing to those looking for long term, 'safe' investments.
In the end, victims will end up transferring their savings directly to criminal gangs, under the false belief that they are sending them to a legitimate investment firm.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:
"If you're considering an investment, visit the FCA Register to make sure the firm you're dealing with is authorised. Check our Warning List of firms you should avoid, use the contact details on our FCA Register, not the details the firm gives you, and check for subtle differences to avoid 'clone firm' scams. And if you're still unsure, call our consumer helpline for further information.
"When it comes to clones, I cannot emphasise enough how important it is to double check every detail."
If you think you've fallen victim to an investment fraud, report it to Action Fraud as soon as possible by calling 0300 123 2040.
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