£9 million loss for ‘clone firm’ investment scam victims from Kent
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Fraud victims from Kent lost a total of more than £9 million between December 2019 and December 2020 after mistakenly investing in sham companies.
‘Clone firm’ investment scams are where criminals use the name, address and Firm Reference Number of real companies authorised by the Financial Conduct Authority (FCA) and set up exact replicas of their existing websites. They then encourage people to invest by taking out adverts on social media or internet search engines, which contain links to the false websites.
Between December 2019 and December 2020, a total of 476 reports of this type of offending were received by Action Fraud from victims living in Kent.
The returns promised by those responsible 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.
In the end, victims will end up transferring their savings directly to criminal gangs under the false belief they are sending them to a legitimate investment firm. Victims will often not realise they have been scammed until months later, when they fail to receive quarterly returns or investment reports.
Kent Police is now supporting a national campaign led by Action Fraud, City of London Police and the FCA to raise awareness of this type of offending.
Detective Inspector Helen Smithers of the Serious Economic Crime Unit said:
‘In many cases clone firms are very sophisticated operations with elaborate websites and investor login sections, often hosted overseas and outside of the UK jurisdiction.
‘It is therefore very important that anyone considering making an investment in a company takes the time to really check who they are dealing with such as by asking a registered financial advisor, checking the Financial Services Register and taking the time to consider if they could be falling victim to a scam.
‘Anyone who thinks they may have mistakenly invested in a clone firm is advised to report it to Action Fraud as soon as possible. Steps can then be taken to identify and arrest those responsible, to take down the offending websites and to help prevent anyone else from losing their hard-earned savings.’
How to protect yourself
Checking a company’s Firm Reference Number (FRN) alone is not enough as criminals will often copy FRN numbers and encourage victims to check the number on the Financial Services Register to prove their legitimacy.
Anyone considering an investment opportunity should double-check all the details of a firm. This includes the telephone number listed on the Financial Services Register.
1. Reject unsolicited investment offers made online, via social media or over the phone. Be wary even if you initiated contact.
2. Always check the Financial Services Register to make sure you are dealing with an authorised firm and check the FCA Warning List of firms to avoid.
3. Only use the telephone number and email address on the Financial Services Register, not the contact details the firm gives you, and look out for subtle differences.
4. Consider seeking impartial advice before investing.
Investors can test if they can spot an investment scam from a smart investment by taking the ‘Scam or Smart’ quiz. Click here to find out more.
If you think you have fallen victim to an investment fraud, report it to Action Fraud as soon as possible online at this link or by calling 0300 123 2040.