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Warning: Don’t fall victim to fraudulent investment opportunities

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Investment scams can be hard to spot. Every year, victims lose thousands of pounds to criminals imitating genuine investment firms by clicking on adverts that lead them to fraudulent websites designed to replicate the page of a real investment firm. These imitation websites are known as “cloned companies”.

We are working with the National Economic Crime Centre to warn the public about the increasing number of bogus investment websites, as new figures reveal:

  • In the first six months of 2021, £36.2m was lost to ‘cloned company’ investment scams.
  • In the first six months of 2021, 1,100 reports were received, equating to an average loss of £47,000 per victim, when investing money in cloned companies.

What is a cloned company? And how do they target your savings?

They are set up by fraudsters using the name, address and ‘Firm Reference Number’ (FRN) of real companies authorised by the Financial Conduct Authority (FCA).

The criminals running these scams engage with victims through a number of channels. Often they take out adverts on social media platforms and search engines designed to attract people to click on them by highlighting enticing offers of high returns.  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.

Once a person clicks on the advert they are taken to an exact replica of a website belonging to a legitimate investment firm. The most sophisticated criminals will even clone the website domain name (i.e. the unique address registered to that site). Once victims have registered their interest, they’ll be contacted by the offenders, who often obtain the names of genuine employees at investment firms and create seemingly legitimate company email addresses, but with very subtle changes such as one substituted letter.

There have also been instances of investors inputting their contact details into popular price comparison websites and then being phoned by criminals claiming to be from a well-known, legitimate investment firm. Another tactic used by these criminals to target investors involves sending victims sales materials linking to websites of legitimate firms.

Eventually, given false confidence by the various tactics used by cloned company scammers, 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’ve been scammed until months later, when they fail to receive quarterly returns or investment reports.

How to protect yourself

  1. Reject unsolicited investment offers whether made online, on social media or over the phone. Be cautious when dealing with large sums of money, even if you initiated the first contact.
  2. Always check the FCA Register to confirm the contact details provided to you by the firm. If the website, email and telephone number don't match, don't invest. Look out for subtle differences such as letters replaced with numbers (e.g. S and 5, O and 0), additional words or spelling errors. Make sure you’re dealing with an authorised form, but remember these are public registers which fraudsters can also take information from to sound legitimate.
  3. Check the FCA Warning List of firms to avoid.
  4. If you have visited a website, you think is suspicious, report it to the National Cyber Security Centre, using their quick and easy referral tool.
  5. Consider seeking impartial advice before investing.

If you think you’ve fallen victim to an investment fraud, report it to Action Fraud as soon as possible online at http://www.actionfraud.police.uk or by calling 0300 123 2040. 

Advice for pension investment

Are you a pensioner looking to invest your pension or lump sum early? Please see our dedicated pension fraud advice page on how to protect yourself from pension fraud.

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