UK Consumers Lost £78 Million in Clone Firm Investment Scams

The Financial Conduct Authority (FCA) has issued a warning over rising Clone Clone A clone refers to a fraudulent attempt by an entity or individual to use the details of an authorized firm in a bid to convince people that they work that firm.This refers to a relatively new tactic that has seen fraudsters using the name, ‘firm registration number’, and address of firms and individuals authorized by regulators to suggest they are genuine. Clones are seemingly primitive techniques, though newly adopted by scammers that have evolved in the information era. As regulators push for A clone refers to a fraudulent attempt by an entity or individual to use the details of an authorized firm in a bid to convince people that they work that firm.This refers to a relatively new tactic that has seen fraudsters using the name, ‘firm registration number’, and address of firms and individuals authorized by regulators to suggest they are genuine. Clones are seemingly primitive techniques, though newly adopted by scammers that have evolved in the information era. As regulators push for Read this Term firm investment scams in the country. The authority mentioned that the consumers lost nearly £78 million while investing in fraudulent companies imitating genuine investment firms between January and December 2020.

According to an official announcement, the affected consumers lost £45,242 each on average during the last year. The FCA mentioned that the Coronavirus Coronavirus The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, Read this Term pandemic escalated the clone firm scams in the UK as 77% of investors admitted that they were unsure about clone investment firms.

The authority advised people to verify the regulatory status and address of the company before making an investment. Additionally, the FCA requested consumers to contact the firm through the phone number mentioned on the FCA register to make sure they are dealing with the real company.

“Fraudsters use literature and websites that mirror those of legitimate firms, as well as encouraging investors to check the Firm Reference Number (FRN) on the FCA Register to sound as convincing as possible. Last year, we issued alerts in relation to over 1,100 firms including clones, which has more than doubled since 2019 and we are working with the National Economic Crime Centre (NECC) and National Cyber Security Centre to take down clone sites when they are discovered,” Mark Steward, Executive Director of Enforcement and Market Oversight at FCA said in the press release.

FCA’s ScamSmart Campaign

The authority issued the latest warning and released data related to the clone firm investment scams as part of its ScamSmart campaign to educate investors about the rising fake firm scams.

“Clone firms are fake firms set up by scammers using the name, address and ‘Firm Reference Number’ (FRN) of real companies authorized by the FCA. Once set up, these fraudsters will then send sales materials linking to websites of legitimate firms to dupe potential investors into thinking they are the real firm when they are not,” the official announcement states.