Milton Keynes businesses are being warned about 'clone firms' after they resulted in more than £18m in losses across the Thames Valley in 2020.
Thames Valley Police today (27/1) shared a report that shows how 'clone firm' investment scams increased by 29% in April 2020 compared to March, when the UK went into its first lockdown.
Action Fraud published the data which reveals losses of more than £18 million in the Thames Valley area alone last year when investing with fraudsters imitating genuine investment firms. Thames Valley victims are most often male with people between the ages of 50 and 59 most commonly affected.
The ongoing financial impact of coronavirus may also make people more susceptible to these types of clone scams. In the UK, forty two percent of investors say they are currently worried about their finances because of the pandemic, and over three quarters (77%) have, or plan to, make an investment within the next six months to help improve their financial situation.
However, even the most experienced investor could be at risk. Three quarters (75%) of investors said they felt confident they could spot a scam. However, 77% admitted they did not know, or were unsure, what a ‘clone investment firm’ was.
Clone firms are set up by fraudsters using the name, address and ‘Firm Reference Number’ (FRN) of real companies authorised by the FCA. The criminals will then create legitimate-looking websites, pay for adverts, and sometimes even clone the website domain name. Once victims have registered their interest, they’ll be contacted by the fraudsters, who often obtain the names of genuine employees of investment firms and create seemingly legitimate company email addresses, but with very subtle changes.
In the end, 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.
There are a number of ways to protect your business from these fraudsters.
Anyone considering an investment opportunity should double-check all the details of a firm, not just the FRN, on the FCA register. This includes the telephone number and it is important you only use the number on the FCA Register to make contact with the firm.
Remember, 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, visit www.fca.org.uk/scamsmart to find out more.
If you think you’ve fallen victim to an investment fraud, report it to Action Fraud as soon as possible online at www.actionfraud.police.uk or by calling 0300 123 2040.
