On the go: Fraudsters pretending to be legitimate companies stole £78m from unsuspecting victims through pension and investment scams in 2020, according to Action Fraud.
Data published by Action Fraud on Wednesday, as part of the Financial Conduct Authority’s ScamSmart campaign, showed that in 2020 individuals reported average losses of £45,242 when investing with fraudsters imitating genuine investment companies.
Reports of clone firms increased 29 per cent in April 2020 compared with March as fraudsters looked to take advantage of uncertainty created by the Covid-19 pandemic.
According to the FCA, the risk of savers being duped by criminals is likely to increase as financial vulnerability rises amid the crisis.
It found that two-fifths (42 per cent) of investors said they were worried about their finances due to the pandemic, and more than three-quarters (77 per cent) planned to make an investment within the next six months to help improve their financial situation.
Scammers operate by setting up clone firms using the name, address and firm reference number of real companies authorised by the FCA. They then send out sales materials linking to the websites of legitimate companies, to trick potential investors into thinking they are dealing with the real firm.
To thwart the scammers, the FCA and Action Fraud have urged savers to check the regulator’s warning list of companies and individuals that it knows are operating without its authorisation.
In addition, the specific details of a company, such as the telephone number and website address, can be verified on the FCA register so that people can be sure they are dealing with the real firm.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Last year we issued alerts in relation to more than 1,100 firms including clones, which has more than doubled since 2019 and we are working with the National Economic Crime Centre and the National Cyber Security Centre to take down clone sites when they are discovered.”
He said if people were still unsure about a company after checking the FCA’s website, they should call the consumer helpline for further information.
“When it comes to clones, I cannot emphasise enough how important it is to double check every detail,” Mr Stewart added.
This article originally appeared on ftadviser.com
