With the holiday season approaching, scammers are relentlessly trying to deceive unsuspecting retail investors. The UK's financial market watchdog has warned about a clone of the popular investment firm Spreadex.
One "S" Too Many: FCA Warns against Spreadex Clone
According to a warning published today (Friday) by the FCA, a firm operating under the website sspreadex.com is impersonating Spreadex, a regulated spread-betting service provider in the UK.
Users who accidentally type an extra "s" in the broker's website address (sspreadex.com instead of spreadex.com) are redirected to a fraudulent clone site attempting to steal data by masquerading as the popular platform, which netted £28.2 million in profit during the fiscal year 2023.
The FCA also warns against emails sent from the spreeadex@spreeadex.com mailbox, which closely resembles the original broker's but also contains typos.
"Scammers may give out other false details, including email addresses, telephone numbers, postal addresses, and Firm Reference Numbers," the FCA commented in the warning. "They may mix these details with the genuine details of authorized firms. They may also change their contact details over time."
The tactic of creating clone firms is, unfortunately, very common. In November, the FCA warned against clones of popular platforms like the social trading platform eToro, and scammers impersonating the publicly traded IG Group. In the same month, fraudsters used the names and trademarks of Santander and Saxo Bank.
How Does a Clone Firm Work and Why Is It Dangerous
The strategy of clone firms is to make unrealistic investment promises to attract potential investors. They target people searching for online investment opportunities. These clone firm websites lure visitors to enter their contact details through forms, which are then used to offer scam investment opportunities.
Initially, these clone firms may even provide some returns to investors to appear legitimate. However, they stop the payouts once larger investments are made by their victims. Without regulation , investors have no protection against such scams and suffer significant financial losses.
According to the UK's FCA, the prevalence of clone firms impersonating authorized financial companies has increased recently. The FCA maintains a warning list with clone firm names and issues alerts whenever new fraudulent entities are identified. Investors can avoid these clone scams by checking for authorization status and referring to regulator warnings.
