One type of scam that we frequently see our clients falling victim to is clone firm investment scams. This type of scam is especially easy to become a victim of, as it involves scammers mirroring the likeness and details of well-established and legitimate firms in order to trick customers into believing their scam.
The Financial Conduct Authority (FCA) reported that over £78 million was stolen from the public between January and December 2020, with each individual losing up to £45,000 on average.
Scammers trick consumers by setting up a fake firm using the same details of a legitimate firm, often with subtle differences that go unnoticed. When contacting a potential investor, they will provide the links to the website and reviews of the real company, tricking you into believing that you are working with a reputable trader.
Whilst clone firm scams are difficult to spot, there are some ways to check whether you are dealing with a scammer or a real broker.
The below list details some tips on how to spot a clone firm scam:
- The contact details that the scammers provide you with/contact you on will often differ to the real company. An FCA regulated broker will gave its details listed on the FCA website, so always check the information you have been provided with against the details registered with the FCA.
- Always check the FCA Warning List of firms to avoid, as it is likely that the clone firm may have already been reported to the FCA.
- Website domains of the clone firm are often very similar to the legitimate firm but may differ by a few letters or characters. Always closely check the website address of any platform that you are investing with against the website address of the legitimate firm that you think you are dealing with.
- Avoid investing through links provided to you via online communication with an individual, instead always use the legitimate company’s website through your own browser search.
If you are unsure if the firm that you are investing with is legitimate, or you feel as though you have fallen victim to a clone firm scam already, please contact WRS today for a free consultation.