FCA warns of rising number of clone firm investment scams

The Financial Conduct Authority has issued a warning to consumers to be alert for investment scams involving clone firms.

“Clone firms are fake firms set up by scammers using the name, address and ‘Firm Reference Number’ (FRN) of real companies authorised by the FCA. Once set up, these fraudsters will then send sales materials linking to websites of legitimate firms to dupe potential investors into thinking they are the real firm when they are not.”

Citing a significant increase in reported investment scams, the FCA warns that even the most experienced investors could be affected by these fraudsters.

“The ongoing financial impact of coronavirus (Covid-19) may also make people more susceptible to these types of clone scams. 42% 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 6 months to help improve their financial situation.”

Click here for further advice and to read the full article on the FCA website