New warnings have been issued from Action Fraud, the City of London Police and the Financial Conduct Authority (FCA) as reports of \u2018clone firm\u2019 investment scams increase.<\/b><\/p>\n
The ongoing financial impact of coronavirus may also make people more susceptible to these types of clone scams. Forty two percent of investors say they are currently worried about their finances because of the pandemic, and over three quarters (77%) have, or plan to, make an investment within the next six months to help improve their financial situation.<\/p>\n
However, even the most experienced investor could be at risk. Three quarters (75%) of investors said they felt confident they could spot a scam. However, 77% admitted they did not know, or were unsure, what a \u2018clone investment firm\u2019 was.<\/p>\n
\u2018Clone firms\u2019 are set up by fraudsters using the name, address and \u2018Firm Reference Number\u2019 (FRN) of real companies authorised by the FCA.<\/p>\n
The criminal gangs running these scams can engage with victims through a number of channels. Often they will take out 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. The most sophisticated criminals will even clone the website domain name. Once victims have registered their interest, they\u2019ll 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.<\/p>\n
There have also been instances of investors inputting their contact details into genuine price comparison websites and then being phoned by criminals purporting to be from a well-known, legitimate investment firm.<\/p>\n
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, \u2018safe\u2019 investments.<\/p>\n
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. Often, victims will not realise that they\u2019ve been scammed until months later, when they fail to receive quarterly returns or investment reports.<\/p>\n