£78 Million Stolen in Investment Scams, Warns FCA

FCA- Financial Conductive Authority has given out a warning as the investment scams regarding ‘clone firms’ increased by 29%. The fraud data reveals that up to £78 Million have been lost in investment scams. This has been disclosed as a part of FCA’s aim to help investors, including both businesses and consumers, in avoiding fake firms.

Due to the impact of the on-going COVID-19 pandemic, people are more prone to such scams as more and more investors are worried about their finances. In order to secure their funds, they tend to invest more to improve their financial status. 

FCA warns that even the more experienced investors could become a victim of the clone investment firms. Clone firms are set up by the fraudsters using the name, address, and FRN (Firm Reference Number) of the real companies that are authorized by FCA. Once these firms are set up, they send materials linking to a real company which manipulates the investor into trusting them.

Graeme Biggar, Director General of the National Economic Crime Center said: “The National Economic Crime Center (NECC) and partners including the City of London Police, Serious Fraud Office and Financial Conduct Authority are working with the National Cyber Security Center (NCSC) to tackle the fraudulent and cloned websites behind investment fraud schemes. In one specific initiative targeting FCA-identified fake firms and cloned websites, we worked with the NCSC to remove over 90 cloned websites, plus 134 UK scam phone lines and 105 associated email addresses.”

FCA has released a warning list of firms which is updated every day. The legitimacy of such firms can be verified against the list. The organizations can use digital verification solutions to screen the firms against the FCA’s warning list before investing in any of such firms.