78 million pounds stolen nationally in clone firm investment scams

Alert message sent 29/01/2021 15:40:00

Information sent on behalf of Wiltshire Police

We're supporting the Financial Conduct Authority (FCA) ScamSmart campaign to warn the public as reports of ‘clone firm’ investment scams continue to rise. We’re also issuing advice for investors to help avoid fake firms.

Reports of investing with fraudsters imitating genuine investment firms in Wiltshire increased by 25% in one month alone from March to April 2020 when the UK first went into lockdown. This is slightly lower than the national average 29% increase.

Data provided by Action Fraud shows a worrying picture:
  • Victims reported losses of £4.3 million in Wiltshire between January and December 2020, resulting in an average loss of over £22,750 across 189 reports in total.
  • Nationally £78 million has been stolen in 2020, with reported losses of more than £45,000 each on average.
With financial concerns high due to the impact of Covid-19, people are more susceptible to these types of clone scams. Some 42% of experienced investors in stocks, shares, bonds or other investment products aged 50+ say they are worried about their finances due to the pandemic. While 75% believe they could spot a scam, 77% admitted they didn’t know or were unsure what a ‘clone investment firm’ was.

Clone firms are fake firms set up by scammers using the name, address and ‘Firm Reference Number’ (FRN) of real companies authorised by the FCA. Fraudsters then send sales and marketing materials linking to websites of legitimate firms to dupe potential investors into thinking they are the real firm when they aren’t.

We want to help prevent these scams and are advising anyone who is considering an investment opportunity the check the FCA’s Warning List of firms which is updated daily. Don’t deal with companies that are not authorised through the FCA, and verify their details through the FCA Register to make sure you’re dealing with the bonified firm.

Wiltshire Police Fraud Manager, Alison Wiles commented “Clone investment scams are particularly difficult to spot at first, fraudsters work hard to make them look incredibly convincing. But by following the advice to check the FCA’s Warning List and Register, it’s easy to double check you’re dealing with a legitimate, authorised firm. The cost of not doing so could be huge.

“Even savvy investors have been convinced by sophisticated looking scams so please do double, triple check before parting with your money. It can be tempting if an investment opportunity looks like a good chance to boost your savings, pension or income, but be vigilant and take extra care. Fraudsters will feel no remorse capitalising on people’s additional financial worry - they will not only set up fake websites or place adverts on social media but use email, text and phone calls to target their next victim.”

In Wiltshire, those aged between 60 and 79 had a highest number of reports in the last year, with over 39% of victims within that age bracket and nearly two thirds (63%) of all victims were male. We’re asking for people to be extra cautious and spread the word to friends and family.

Investors can test if they can spot an investment scam from a smart investment by taking the Scam or Smart quiz, visit www.fca.org.uk/scamsmart to find out more.

If you think you’ve already invested into a fraudulent scheme, report it to Action Fraud on 0300 123 2040, or via their website at www.actionfraud.police.uk.
Message sent by
Sian Rivers (Police, Communications Officer, HQ)

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